DRUG producer GlaxoSmithKline (GSK) yesterday revealed a record £2.2bn charge to settle legal disputes linked to past sales practices and regulatory fines.
The sum is an estimate set aside by the group in its fourth quarter to settle several long-running disputes, and will reduce to £1.8bn after tax deductions.
A significant part of the charge is being used to settle consumer lawsuits filed in the US alleging that its diabetes drug Avandia is linked to heart disease.
Another substantial part of the provision has been earmarked for the outcome of an investigation, led by the US Attorney’s Office for the District of Colorado, into sales and promotional practices of a range of drugs between 1997 and 2004.
GSK previously estimated in July that it would need £1.57bn to settle its legal disputes, and made a second quarter provision.
However, the group said yesterday it had received a “substantial” number of fresh claims since, and expected more public liability cases in the future, leading to a revision of the figure required to settle its cases.
The fresh provision comes as chief executive Andrew Witty, appointed in 2008, looks to draw a line under the firm’s historic legal cases.
The shares closed down 1.6 per cent yesterday at 1,205p.