Paxil suit settled by Glaxo for $40 million

In a settlement approved Tuesday in U.S. District Court in Minneapolis, British drugmaker GlaxoSmithKline agreed to pay $40 million to reimburse health plans that paid for children and adolescents to receive the antidepressant Paxil.

The agreement brings to a close the long-standing class-action litigation against Glaxo, which was sued for allegedly withholding negative information about the safety and efficacy of Paxil for teenagers and children. In 2007, Glaxo agreed to pay $63.9 million to consumers in another class-action settlement. In both cases Glaxo did not admit wrongdoing.

The settlement this week resolves the case on behalf of some 42,000 health plans across the country that paid for the drug, said Paul Dahlberg, an attorney with Meshbesher & Spence, one of nine law firms involved in the case. A third of the settlement will be paid to the law firms.

Although Paxil is not approved by the Food and Drug Administration (FDA) for use by children, doctors may prescribe it for them. Studies have shown that Paxil and other antidepressants in some instances lead to increased thoughts of suicide in adolescents. Last year the FDA ordered drugmakers to add a "black box" warning of the drug's risks after parents and other consumer advocates raised questions about the safety of antidepressants for those under age 18.

Under the settlement, GSK will pay insurers who paid for a Paxil prescription for use by a minor between January 1998 and December 2004. They 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.

If the settlement account is not exhausted, the unclaimed balance will be donated to nonprofits involved in mental health causes.

Josephine Marcotty • 612-673-7394