GSK To Pay Billions More over Avandia

London, UKGlaxoSmithKline (GSK), the maker of the infamous diabetes medication, Avandia (rosiglitazone maleate), has announced that it will set aside $3.4 billion to pay for investigations by the US government and product liability lawsuits stemming from its marketing of the drug. The amount is expected to wipe-out GSK's quarterly profit which will be reported on February 3.

Avandia was the leading diabetes medication used to treat type 2 diabetes mellitus. First approved by the FDA in 1999, the agency reported eight years later a significant increase in the risk of heart attack in those patients to whom Avandia had been prescribed.

In 2007, Dr. Steven Nissen published a study linking the drug with a 43 percent increased risk of heart attacks. In September 2010, the Food and Drug Administration severely restricted the use of Avandia, while the European Medicines Agency banned it all together.

According to a report in the New York Times, GSK settled some 10,000 of 13,000 Avandia product liability suits in the US in 2010 at a cost of $2.36 billion. However, since then, GSK has received substantial new claims the company said in a statement to the London Stock Exchange.

In 2010, GSK also faced investigations into its antidepressant Paxil.