April 28, 2010

Drug Giant Astrazeneca to Pay Record $520 Million for Off-Label Drug Promotion

The Department of Justice and the U.S. Department of Health & Human Services’ Health Care Fraud Enforcement Action Team announced yesterday that drug giant Astrazeneca will pay $520 million to settle a civil settlement to resolve allegations that it illegally marketed and promoted the anti-psychotic drug Seroquel (a drug targeted for schizophrenia and bipolar disorder) for off-label uses not deemed safe and effective by the FDA.  This whistleblower-triggered settlement is the largest off-label marketing settlement in history and is part of the government’s emphasis on combating healthcare fraud.

Under the Food, Drug, and Cosmetic Act, a company must be specific as to the intended uses of a product in its initial drug application to the FDA.  Once the drug is approved, a drug company cannot market or promote the drug for purposes not specifically outlined in the drug’s application.  The U.S. government alleged that between the years 2001-2006, Astrazeneca promoted Seroquel to psychiatrists and other physicians to treat conditions including aggression, mood disorders, Alzheimer’s disease, dementia, anger management, anxiety, post-traumatic stress, depression, and insomnia.  None of these conditions were specified by Astrazeneca as intended uses of Seroquel when the drug was approved for market in September of 1997 and are therefore considered “off-label” uses.  The U.S. government also contends that Astrazeneca specifically targeted off-label drug promotion of Seroquel to primary care physicians, pediatric doctors, physicians who treat the elderly, and long-term care facilities -- typically basic-care providers who do not treat schizophrenia.  Finally, the government alleged that Astrazeneca violated the federal Anti-Kickback Statute by paying fees to doctors it recruited to serve as ghostwriters on studies about the unapproved uses of Seroquel and also to give promotional lectures about off-label uses of the drug.

Astrazeneca denied all allegations but agreed to pay $520 million to resolve the claims.  Under the terms of the settlement, the federal government will receive over $301 million, and various state Medicaid programs will share $218 million.  Florida’s Medicaid program will receive more than $4.25 million, another $3.8 million will be deposited into Florida’s general revenue fund, and another $425,000 will be deposited into a fund to reward Medicaid fraud whistleblowers.

Click here to read entire Press Release from the U.S. Department of Health & Human Services

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