WASHINGTON (Legal Newsline)-AstraZeneca PLC, the U.K.'s second-largest drug maker, has agreed to pay $520 million to settle claims it improperly marketed its blockbuster anti-psychotic drug Seroquel, officials said Tuesday.
Under the settlement, the federal government will get $301.9 million, while state Medicaid programs and the District of Columbia will get up to $218.1 million under the civil judgment.
The U.S. Justice Department and state attorneys general accused the London-based pharmaceutical company of promoting its schizophrenia drug Seroquel for unapproved uses such as in the treatment of anxiety, dementia and sleeplessness and attention deficit hyperactivity disorder. They also said the company illegally marketed the powerful drug for children and the elderly.
"These were not victimless crimes - illegal acts by pharmaceutical companies and false claims against Medicare and Medicaid can put the public health at risk, corrupt medical decisions by health care providers, and take billions of dollars directly out of taxpayers' pockets," U.S. Attorney General Eric Holder said.
Seroquel had sales of $4.87 billion last year, making it AstraZeneca's second-top seller after Nexium, used to treat ulcers. IMS Health ranked Seroquel the fifth best-selling drug in the world.
"This company engaged in an illegal, off-label marketing campaign to boost sales of Seroquel, a powerful antipsychotic drug that should be prescribed with great caution," said California Attorney General Jerry Brown. "This practice of promoting drugs for unapproved uses is dangerous and can have serious and unforeseen consequences."
Brown noted that while doctors may prescribe medications for so-called off-label uses, drug companies are prohibited from promoting drugs for treatment of medical conditions not approved by the U.S. Food and Drug Administration.
AstraZeneca PLC was also accused of providing physicians with illegal kickbacks, paying their way to travel to resort locations to "advise" AstraZeneca about marketing messages for unapproved uses, to serve as authors of articles written by AstraZeneca and its agents, and to conduct studies for unapproved uses of Seroquel, Brown said.
In a statement, AstraZeneca said the company denies any wrongdoing.
"It is in the best interest of AstraZeneca to resolve these matters and to move forward with our business of discovering and developing important, life-changing medicines while avoiding the delay, uncertainty and expense of protracted litigation," Glenn Engelmann, the company's general counsel, said in the statement.
In Oregon, state Attorney General John Kroger said the $5.7 million the Beaver State will get under the settlement will go to the Oregon Health Plan, which provides health care for low- and moderate-income residents.
"This $5.7 million will help us provide health care to Oregonians during this recession," Kroger said.
Under the settlement, AstraZeneca will enter into a five-year Corporate Integrity Agreement with the U.S. Department of Health and Human Services Office of the Inspector General, which will monitor the company's marketing and sales practices.
The settlement was negotiated in part by representatives from the state attorney general offices in California, Illinois, Massachusetts, New Jersey, New York, Ohio and Texas.
The settlement is based on qui tam -- or whistleblower -- cases filed in the U.S. District Court for the Eastern District of Pennsylvania.
From Legal Newsline: Reach staff reporter Chris Rizo at email@example.com.