AstraZeneca to pay penalty for off-label marketing of anti-psychotic drug Seroquel

Company to pay $520m.

It is alleged that the company illegally marketed Seroquel for uses not approved as safe and effective by the FDA. It signed a civil settlement to resolve allegations that by marketing Seroquel for unapproved uses, the company caused false claims for payment to be submitted to federal insurance programs including Medicaid, Medicare and Tricare programs and to the Department of Veterans Affairs, the Federal Employee Health Benefits Program and the Bureau of Prisons.

In March 2006, AstraZeneca brought certain conduct to the attention of the government and then cooperated in the investigation of the allegations being settled.

Under the terms of the settlement, the federal government is expected to receive $301,907,007 from the civil settlement, and the state Medicaid programs and the District of Columbia will share up to $218,092,993 of the civil settlement, depending on the number of states that participate in the settlement. The allegations were originally brought in a lawsuit under the qui tam or whistleblower provisions of the False Claims Act and various state False Claims Act statutes.

In addition to the civil settlement agreement, resolution of the matter includes a corporate integrity agreement (CIA) between AstraZeneca and the Office of Inspector General of the Department of Health and Human Services.

The five-year CIA requires, among other things, that a board of directors committee annually review the company's compliance program and certify its effectiveness; that certain managers annually certify that their departments or functional areas are compliant; that AstraZeneca send doctors a letter notifying them about the settlement; and that the company post on its website information about payments to doctors, such as honoraria, travel or lodging.

AstraZeneca is subject to exclusion from Federal health care programs, including Medicare and Medicaid, for a material breach of the CIA and subject to monetary penalties for less significant breaches.

The US alleges that AstraZeneca illegally marketed Seroquel for uses never approved by the FDA. Specifically, between January 2001 through December 2006, AstraZeneca promoted Seroquel to psychiatrists and other physicians for certain uses that were not approved by the FDA as safe and effective.

According to the settlement agreement, AstraZeneca targeted its illegal marketing of the anti-psychotic Seroquel towards doctors who do not typically treat schizophrenia or bipolar disorder, such as physicians who treat the elderly, primary care physicians, pediatric and adolescent physicians, and in long-term care facilities and prisons.

Eric Holder, attorney general of US said: "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.

"This Administration is committed to recovering taxpayer money lost to health care fraud, whether it's by bringing cases against common criminals operating out of vacant storefronts or executives at some of the nation's biggest companies."