A federal judge has approved a $40 million settlement in which GlaxoSmithKline (GSK) has agreed to reimburse insurance companies that covered purchases of antidepressant drug Paxil for children.

GSK faces a host of class actions charging that the pharmaceutical manufacturer promoted Paxil for adolescents and children even though clinical studies found the drug increased suicide risks in younger patients.

The settlement, approved earlier this week by U.S. District Judge Michael J. Davis, in the District of Minnesota, applies to insurance firms and other third parties that covered the purchases of Paxil for patients under 18 between Jan. 1, 1998, and Dec. 31, 2004. The case is: Carpenters and Joiners Welfare Fund v. SmithKline Beecham Corp., dba GlaxoSmithKline, No. 04-cv-3500 (D. Minn.). Class members would be refunded for up to 40% of their actual cost of Paxil if they provide proof that the patient was diagnosed with a severe depressive disorder and was prescribed Paxil or Paxil CR.

The original claims were filed in four class actions in California, Minnesota and Pennsylvania.

About $13 million of the settlement will go to attorney fees, litigation costs and incentive awards for the class representatives. The lawyers representing the insurance companies are: Michael Baum, of Baum Hedlund Aristei & Goldman; Brian Strange of Strange & Carpenter in Los Angeles; J.D. Horton, a partner at Los Angeles-based Quinn Emanuel Urquhart Oliver & Hedges; Christopher Coffin of Pendley Baudin & Coffin in Plaquemine, La.; Shawn Raiter of Larson King in Saint Paul, Minn.; Stephen Swedlow of Swedlow & Assoc. in Chicago; Paul Dahlberg, managing partner of the Rochester, Minn., office of Minneapolis-based Meshbesher & Spence; Michael Perrin, founding partner of Houston’s Bailey Perrin Bailey; and William Marvin of Philadelphia’s Cohen, Placitella & Roth.

GSK’s lawyers include Dwight Davis and Meghan Magruder, both partners at Atlanta’s King & Spalding.

“GSK has agreed to this settlement, despite its litigation defenses, in order to avoid the costs, burdens and uncertainties of ongoing litigation,” said Sarah Alspach, a GSK spokeswoman, in a prepared email statement. “GSK denies all liability. Paxil is not approved by the Food and Drug Administration for use in patients under 18 years of age, but physicians can prescribe the drug for ‘off-label’ use in that patient population.”

The settlement is the second phase of litigation against GSK over Paxil use for children. Last year, the company paid almost $64 million to settle claims of parents who sought reimbursement for the costs of paying for the drug prescriptions.