October 2, 2008 / 6:54 AM / 11 years ago

Glaxo settles U.S. Paxil lawsuit for $40 mln

LONDON, Oct 2 (Reuters) - GlaxoSmithKline (GSK.L) has agreed to settle a long-standing U.S. case over its antidepressant Paxil by paying insurers $40 million to reimburse health plans that paid for children and adolescents to receive the drug.

Baum, Hedlund, Aristei & Goldman, a law firm representing the plaintiffs, said on Thursday the settlement was approved in the U.S. District Court in Minneapolis.

The agreement ends class-action litigation against Glaxo over the issue, after the British-based drugmaker was sued for allegedly suppressing studies showing the drug was not suitable for children.

Last year, Glaxo agreed to pay $64 million to consumers in another class-action settlement. In both cases Glaxo did not admit liability.

Although Paxil was never approved for use by children, doctors could prescribe it on an ‘off label’ basis, although Glaxo was not allowed to promote it for this purpose.

Stricter warnings were issued for the drug, however, after clinical trial data raised doubts about the safety of antidepressants for those under age 18 and the risk that the medicine — and others of a similar type — might increase suicidal behaviour.

Under the latest settlement, Glaxo will reimburse insurers who paid for a Paxil prescription for use by a minor between 1998 and 2004.

Insurers may claim a refund of 40 percent of their actual costs of the drugs prescribed to children and adolescents diagnosed with a major depression, or 15 percent of the cost if the diagnosis was unknown. (Reporting by Ben Hirschler; editing by John Stonestreet)

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