Glaxo Writes Off $3.4 Billion to Cover Avandia Costs
More bad news for Glaxo Smith Kline as the company attempts to account for the costs of Avandia litigation. .
GSK made the announcement in a statement posted on the company's website. Glaxo will take a $3.4 billion write-off out of fourth quarter profits to cover liability costs for blockbuster diabetes drug Avandia.
Glaxo has now shaved close to $6 billion off it's bottom line in an attempt to account for the costs of litigation around the drug.
In the statement, the company's vice president for litigation says GSK has wrapped up a number of lawsuits over the past year related to Avandia. But the statement also says there could be more costly write-offs in the future as more suits are filed. A company spokesperson declined further comment.
Problems with Avandia first surfaced in 2007 in a study showing the drug increased the risk of heart attack - other studies subsequently found increased risk to patients. Last year, the FDA restricted the use of Avandia and made it harder for doctors to prescribe. European regulators have banned the drug.