Bloomberg News

GlaxoSmithKline, SB Pharmco to Settle With 37 States, D.C.

June 23, 2011

(Updates with Illinois attorney general’s comment in third paragraph.)

June 23 (Bloomberg) -- GlaxoSmithKline LLC and SB Pharmco Puerto Rico Inc. entered into a $40.8 million accord with 37 U.S. states and the District of Columbia to resolve allegations they breached drug manufacturing standards, Illinois Attorney General Lisa Madigan said.

Madigan, in a press statement issued today, said that between 2001 and 2004 the companies made bad batches of the anti-nausea drug Kytril, which is used by chemotherapy patients; Avandamet, a drug used to treat diabetes; the antidepressant Paxil CR and the antibiotic topical treatment Bactroban.

“Consumers put their faith in drug companies that the medications they purchase are safe,” the attorney general said. “My office will not tolerate pharmaceutical companies cutting corners at the potential expense of consumer health.”

Madigan, in a complaint and settlement agreement she said was filed today at the Illinois state courthouse in Chicago, accused the drug companies of unfair and deceptive practices.

“There is no current cause for concern for patients,” she said, adding that the products in question had previously been recalled or have since expired and the manufacturing facility has closed.

“The company chose to settle the matter, which it initially disclosed in its 2010 fourth quarter results and its 2010 annual report, to avoid the expense and uncertainty of protracted litigation and trial,” according to a GlaxoSmithKline statement issued today.

The drugmaker, which has offices in Philadelphia and Research Triangle Park, North Carolina, didn’t admit to any wrongdoing or liability. The company is a unit of London-based GlaxoSmithKline Plc.

SB Pharmco Puerto Rico is also a GlaxoSmithKline unit.

The settlement money will be divided among Illinois, Oregon, 35 other states and the District of Columbia, according to Madigan.

--Editor: Glenn Holdcraft

To contact the reporter on this story: Andrew Harris in Chicago at aharris16@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net


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