Glaxo Pays $41M to 37 States for Bad Drug Plant

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By Cynthia Hsu, Esq. on June 27, 2011 9:48 AM

The recent GlaxoSmithKline (Glaxo) settlement means the drug company will be paying $41 million to 37 states and the District of Columbia. The settlement is about Glaxo's "bad drugs," arising out of medicine manufactured at the company's former factory in Puerto Rico.

The company made "bad drugs" between 2001 and 2004. The drugs included anti-nausea drugs, diabetes drug, and the antidepressant Paxil, according to prosecutors, Bloomberg reports.

The company failed to make sure that certain drugs were not contaminated, and some tablets may have contained too much or too little of the active ingredient, says the criminal complaint.

Allegedly, the company also did not take enough care so that the different types and strengths of drugs were mixed together in the same bottles, reports the AP.

The drugs were widely sold in states, though the focus of the lawsuit were the pills that was manufactured at the Puerto Rico factory. The $41 million settlement also comes after another $750 million payment that Glaxo agreed to pay to the Department of Justice last year, reports Reuters.

The drug company says that they did not admit to any wrongdoing or liability under consumer protection laws as part of the $41 million settlement. Each state will be sharing a portion of the total settlement, according to Reuters.

Pharmaceutical drug companies are often at the center of products liability lawsuits. Generally, manufacturers have the duty to test the drugs and medicines to make sure they are up to FDA standards before releasing them to the public. Defective drugs can mean that the manufacturer or drug company is liable - even if the drug is otherwise approved by the FDA.

Here, however, Glaxo is not admitting any wrongdoing or that they violated consumer protection laws in the settlement. By not admitting liability or wrongdoing, they might be thinking about trying to partially shield themselves from future lawsuits that can be started by patients who may have been injured by the allegedly defective drugs.

Glaxo's bad drugs and Glaxo's settlement with the state has at least closed that chapter of litigation for the company. Glaxo hoped to settle to avoid the "expense and uncertainty of protracted litigation and trial," the company said in a statement, reports Bloomberg.

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