GlaxoSmithKline Plc has paid almost $1 billion to decide lawsuits over Paxil since it introduced the antidepressant in 1993, plus about $390 million for suicides or attempted suicides said to be linked to the drug, says court records and people common with the cases.
As part of the sum, Glaxo, the U.K.’s largest drugmaker, so far has paid $200 million to settle Paxil habit and birth-defect cases and $400 million to end antitrust, fraud and design claims, coming from the people and court records.
The $1 billion “would be worse than many people are expecting,” said Navid Malik, an analyst at Matrix Corporate Capital in London. “I don’t think this is within the boundaries of current assumptions for analysts.”
The London-based company hasn’t told of the agreement total in business filings. It has made public some accords. Glaxo’s provision for legal and other non-tax disputes as of the end of 2008 was 1.9 billion pounds ($3.09 billion), apparent in its latest annual report. This integrated all legal matters, not just Paxil. The company said 112 million pounds of this sum would be “reimbursed by third-party issuers.”
The drugmaker has condensed its insurance coverage to contain costs, “accepting a greater degree of uninsured exposure,” the annual report states. “Recent insurance loss experience, including pharmaceutical product-liability exposures, has increased the cost of, and narrowed the coverage afforded by, insurance for pharmaceutical companies generally,” Glaxo said.
