Average Paxil Birth Defect Settlement $1.2 Million

August 28, 2010, 4:45PM. By Gordon Gibb

London, UKWhile no amount of money can adequately compensate for a life-altering birth defect allegedly caused by or linked to the use of the antidepressant Paxil, the average settlement in a Paxil birth defect lawsuit appears to be in excess of $1.2 million for each family involved. The Newark Star-Ledger noted in July that Paxil manufacturer GlaxoSmithKline (Glaxo) has put aside $2.4 billion for the resolution of litigation involving Paxil and one other drug in Glaxo's product line.

Glaxo reported that legal costs factored into a loss of $464 million during its second quarter (Q2). The Associated Press (AP) said in July that a charge of $2.4 billion for the purpose of settling litigation had a lot to do with the loss for the three months ending June 30th.

In contrast, Glaxo's Q1 results reflected a profit of 1.34 billion British pounds (US $2.1 billion). Excluding major restructuring costs, the world's second largest pharmaceutical company by revenue said that it recorded a profit of 130 million pounds ($2.2 million) compared to 1.57 billion pounds ($2.43 billion) in the same period a year prior.

Glaxo, according to AP, has been facing various legal issues that are not confined solely to Paxil and Paxil side effects. The Type 2 diabetes drug Avandia is also a Glaxo product that has been the subject of numerous lawsuits.

AP reports that the manufacturer was also facing an investigation into its facility at Cidra, Puerto Rico. The company also faced antitrust litigation involving Apotex Inc., but Glaxo said that matter was settled.

While sales in the Glaxo product line were up 17 percent in emerging markets, 9 percent in Asia Pacific and 1 percent in Europe, sales were down in the US 13 percent—essentially producing a flat sales curve for Q2.

Overall, revenue was 4 percent higher than a year earlier.

The company said in a conference call with journalists in July that it had settled the majority of outstanding legal issues surrounding Paxil birth defects and other side effects. However, GlaxoSmithKline Chief Executive Andrew Whitty was reported by AP to have declined an opportunity to provide any further details of Glaxo's exposure to legal cases beyond what is already known.