GSK reaches $3 billion Avandia settlement

GlaxoSmithKline announced today that it has reached a $3 billion settlement agreement with the federal government, which had been investigating the company's marketing of its diabetes drug Avandia.

GSK announced back in January that it was taking a $3.5 billion charge to cover expenses linked to investigations and suits over Avandia.

The British company, which has its North American headquarters in Research Triangle Park, has set aside more than $6 billion for legal costs tied to the drug, which has been linked to increased risk of heart attacks.

European regulators ordered Avandia off the market more than a year ago, and the U.S. Food and Drug Administration restricted its use in the United States.

The settlement announced today addresses the company's civil and criminal liabilities. It's expected to be finalized next year.

GSK plans to use cash reserves to pay the settlement.

"This is a significant step forward resolving difficult, long-standing matters which do not reflect the company that we are today," GSK CEO Andrew Witty said in a release announcing the settlement.

"In recent years, we have fundamentally changed our procedures for compliance, marketing and selling in the U.S. to ensure that we operate with high standards of integrity and that we conduct our business openly and transparently."

GSK has about 3,800 workers in RTP and 600 at its manufacturing plant in Zebulon.

The company still produces some Avandia at the Zebulon facility, but it represents a small portion of the plant's overall output, GSK spokeswoman Mary Anne Rhyne said.