GlaxoSmithKline (NYSE: GSK) is changing labeling of its diabetes pill Avandia to include safety restrictions ordered by federal health authorities because of the drug’s links to heart attack.

The Food and Drug Administration announced the changes in September as the latest safety action against the former blockbuster drug, which has triggered thousands of lawsuits and a Department of Justice investigation.

GSK recently set aside more than $3 billion to cover legal costs and also recently settled a case involving the death of a North Carolina patient.

The new U.S. label indicates the drug is only intended for patients who cannot control their blood sugar with any of the other diabetes medications on the market.

GSK also said that the FDA is requiring a “risk evaluation mitigation strategy” program “with additional measures to ensure the safe use of the medicine.”

“Our primary concern continues to be patients with type 2 diabetes and we are making every effort to ensure that physicians in Europe and the US have all the information they need to help them understand how these regulatory decisions affect them and their patients,” Dr. Ellen Strahlman, GSK’s chief medical officer, said in a statement.

The pill is banned in Europe through the European Medicines Agency.

“As a result, physicians in Europe are being advised that affected patients need to be transitioned to alternative treatment options,” GSK said. “The EMA has stated that the suspension will remain in place unless convincing data are provided that identify a group of patients in whom the benefits of the medicine outweigh its risks.”

The FDA first approved Avandia in 1999 and it became the top-selling diabetes pill in the world by 2006. But use has plummeted since a 2007 analysis linked the drug to heart attack.

GSK also said that a current clinical trial using Avandia required earlier by the FDA has been put on hold.

Sales of Avandia fell 18 percent in the first half of 2010 to $500 million. In the US, sales fell 23 percent to $256 million, GSK reported Monday.

More than 900,000 U.S. patients filled prescriptions for Avandia in the first half of 2010, according to health data firm IMS Health. That number is expected to shrink as the new FDA restrictions go into place.

London-based Glaxo reported late last year the Justice Department and several state attorneys general are investigating the development and marketing of Avandia. A Senate investigation released last year concluded that Glaxo knew about the risks of its drug years before they were made public and withheld important data from the FDA.

The company has reportedly settled thousands of personal injury lawsuits filed by Avandia patients, though Glaxo executives say a number of additional lawsuits have been filed since the FDA’s announcement last year. They have not specified the number

Read the full GSK announcement here.

GSK maintains its U.S. headquarters in RTP.

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