SmithKline settles US dispute

SmithKline Beecham, the pharmaceuticals giant, has paid $325m (pounds 199m) to settle a long-standing legal dispute with the US government for overcharging Medicare for patient services through its Clinical Laboratories division.

The payment will end civil and administrative claims against SmithKline for disputed claims from 1989 to 1996, and follows last week's announcement that the company had reached a tentative settlement over the charges. Jan Leschly, SmithKline's chief executive, said yesterday: "SmithKline Beecham Clinical Laboratories never intentionally violated any laws."

He attributed the disputes partly to "ambiguities over regulations and guidelines," and said the company had decided to make a settlement to avoid "enormous potential costs and uncertainties connected with lengthy litigation".

SmithKline set aside $406m in 1995 to cover legal costs associated with the charges through the US Department of Health and Human Services, as well as another lawsuit brought by independent pharmacies over alleged discriminatory pricing practices.

Almost a year ago the company offered to pay $30m to settle the dispute and also $20m worth of generic Tagamet, the anti-ulcer drug. A spokesman said the pharmacies may still appeal that decision.