The British drug company GlaxoSmithKline said Thursday that it had agreed to pay $3 billion to settle United States government civil and criminal investigations into its sales practices for numerous drugs.

The settlement would be the largest yet in a wave of federal cases against pharmaceutical companies accused of illegal marketing, surpassing the previous record of $2.3 billion paid by Pfizer in 2009. In recent years, drug companies have been prime targets of federal fraud investigations, which have recovered tens of billions of dollars for Medicaid and Medicare.

The cases against GlaxoSmithKline include illegal marketing of Avandia, a diabetes drug that was severely restricted last year after it was linked to heart risks. Federal prosecutors said the company had paid doctors and manipulated medical research to promote the drug.

Even for a flush drugmaker like GlaxoSmithKline, $2.4 billion dollars is a lot of money to wipe off the books in a single quarter.

Bottles of Avandia diabetes pills are seen at Jack’s Pharmacy on May 21, 2007, in San Anselmo, Calif.
Justin Sullivan/Getty Images
Yet, just hours after a panel of U.S. experts voted in favor of keeping Glaxo’s diabetes pill Avandia on the market, despite known heart risks, that’s what the drugmaker said it would do in its second quarter.

All that money wil go to cover the cost of a bunch of legal problems, including the settlement of lawsuits over harm allegedly linked to Avandia.

The company said “the substantial majority of the product liability cases relating to Avandia have now been settled.” Glaxo hasn’t disclosed how much money that involves. But Bloomberg reported the company has already agreed to pay about $460 million to put those cases to rest.

It could have been worse. Before the meeting of experts advising the Food and Drug Administration on Avandia concluded Tuesday, some analysts figured the Avandia costs could run as high as $6 billion, Reuters reported.

If you’ve read the news lately, you may have heard that GlaxoSmithKline agreed to settle approximately 700 Avandia lawsuits for a reported $60 million. You may also have heard the calls to end the Avandia safety trial known as the TIDE trial. This may have you concerned about how these developments affect you, and rightfully so.

GlaxoSmithKline has reportedly agreed to settle 700 lawsuits for approximately $60 million. How this settlement affects you depends on where you are in the lawsuit process, if you are involved at all.

Obviously, if you’re one of the 700 lawsuits that have been settled, then your lawsuit is now done; you’ll receive your share of the settlement and no longer have to worry about the litigation.

If you are one of the remaining lawsuits (reported to number in the thousands), how this settlement affects you is less clear. Details about the settlement have been kept quiet. Based on how big businesses operate, my guess (this is just speculation here) is that GlaxoSmithKline has not admitted to any wrongdoing (something most businesses attach to their settlements). The settlement, however, shows that the drug maker is willing to sit down with plaintiff’s lawyers to negotiate, which could be a good thing for the remaining lawsuits.