Pharmaceutical Company, GlaxoSmithKlines has declared that it is making a provision of £2.2 billion through which it will be paying for all the legal costs pertaining to its diabetes drug Avandia.

It also said that all the legal charges are going to be put up on the final quarter results of 2010; and if that happens then the whole profit for the quarter is going to be wiped out.

Analysts had said in their report that it will be having a net income of £1.45 billion for the quarter ending December. But that is quite less than the post-tax cost that it is facing till now.

Meanwhile, GlaxoSmithKline's has also said that besides covering claims related to Avandia, it will also be covering the investigations out forward by the US Attorney's Office for the District of Colorado into its regular sales and promotional activities.

Last year it had to bear £1.57 billion for all the legal claims. GSK's senior vice president, global litigation, PD Villarreal, said that this is a significant charge and they are doing this so that longer-term ways are kept secure.