GlaxoSmithKline PLC (NYSE: GSK) said Thursday that it has agreed in principle with the United States government on a $3 billion settlement of investigations of the company’s sales and marketing practices.

The agreement is expected to be completed next year, and the settlement will be paid through the company’s cash resources, it said.

The case dates from 2004, and includes investigations of possible price irregularities and the development and marketing of the diabetes drug Avandia.

GSK operates its U.S. headquarters in Research Triangle Park, N.C. and employs some 5,000 people in the Triangle area.

GSK shares declined slightly in early trading on the London Stock Exchange.

“This news essentially draws a line under a 10-year legal saga,” Gbola Amusa, an analyst at UBS AG in London who recommends buying Glaxo shares, told Bloomberg news. “This removes significant uncertainty on ongoing legal issues.”

The company said the tentative settlement covers both civil and criminal liabilities.

“This is a significant step toward resolving difficult, long-standing matters which do not reflect the company that we are today,” CEO Andrew Witty said.

“In recent years, we have fundamentally changed our procedures for compliance, marketing and selling in the US to ensure that we operate with high standards of integrity and that we conduct our business openly and transparently.

“We reiterate our full commitment to ensuring appropriate promotion of our medicines to healthcare professionals and to the standards rightly expected by the US Government,” he added.

Among those steps, the company no longer bases bonuses on individual sales targets, GSK said, but on “quality of service.”

(Read the full statement here.)

In June, Glaxo’s U.S. subsidiary agreed to pay more than $40 million to 37 U.S. states and Washington, D.C., to settle complaints about manufacturing processes at a plant in Puerto Rico, which has been closed.

The company also paid a $750 million fine in 2010 in the U.S. related to the Puerto Rico plant.

GSK’s Changes

In its statement GSK spelled out changes it has made:

“Since 2008, GSK has established a new framework for compliance in the US, based on the company’s values, policies and established industry codes of practices. It is supported by a larger compliance staff and strengthened training programs that require certification by employees.

“Other initiatives to drive change in commercial procedures have also been undertaken, including the implementation of a new incentive compensation system for its professional sales representatives who work directly with health care professionals. The new system eliminates individual sales targets as a basis for bonuses, and instead bases incentive compensation on the quality of the service these representatives deliver to customers to support improved patient health. The Company’s US Commercial Practices Policies now meet or exceed the US PhRMA Code governing interactions with healthcare professionals.”

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