AstraZeneca Settles Case for $520 Million
AstraZeneca agreed to a $520 million dollar settlement with the U.S. Department of Justice and a consortium of state Medicaid agencies without admitting any wrongdoing in its marketing of the atypical antipsychotic drug, Seroquel.
“AstraZeneca paid kickbacks to doctors as part of an illegal scheme to market drugs for unapproved uses,” Kathleen Sebelius, secretary of health and human services, said at the event in Washington. She said the company promoted drugs for unapproved uses by children, the elderly, veterans and prisoners.
Glenn Engelmann, AstraZeneca’s U.S. general counsel, released a statement saying the company denies the allegations but settled the investigation with the payment.
The government said the company also paid for ghostwritten journal articles, and marketed the drug to primary care and nursing home doctors targeting off-label, unapproved uses for Seroquel, including Alzheimer’s disease and anger management. A drug must gain U.S. Food and Drug Administration approval for additional uses if the company wants to market those uses to doctors. Otherwise, doctors are free to prescribe a drug for any use they want.
You’d think $520 million is a lot of money, but it represents only 10 percent of one year’s worth of sales of the drug ($4.9 billion) — money the company had already set aside to pay for the settlement. In other words, the company won’t likely feel the pain of this settlement, despite U.S. Attorney General Eric Holder’s statement that this “is the largest amount ever paid by a company in a civil-only settlement of off-label marketing claims.”
If this news sounds like deja vu, it’s because the amount was originally announced in October 2009, and simply formalizes the agreement reached at that time. This settlement somewhat pales in comparison to other recent settlements:
In the largest such case, Pfizer paid $2.3 billion last September, including $1.3 billion in the biggest criminal fine of any type in United States history, for off-label marketing of the painkiller Bextra and other drugs. Bextra was withdrawn from the market in 2005. The Pfizer fine included $301 million for off-label marketing of its antipsychotic drug Geodon.
Eli Lilly paid $1.4 billion in January 2009 to settle investigations into illegal marketing of its antipsychotic drug Zyprexa. Lilly’s settlement included a $515 million criminal fine, which until the Pfizer case was the largest such fine ever imposed on a corporation.
In 2007, Bristol-Myers Squibb and a subsidiary paid $515 million to settle federal and state investigations into marketing of its antipsychotic drug Abilify.
The company also agreed to sign a 5-year “corporate integrity agreement,” according to the article. The agreement will ensure the company’s future payments to doctors are more transparent by requiring their publication on AstraZeneca’s website. Their board of directors will also be responsible for signing off on the company’s compliance program.
Do all of these fines send a message to the pharmaceutical industry? What do you think?
Read the full article: AstraZeneca Settles Case for $520 Million
Grohol, J. (2010). AstraZeneca Settles Case for $520 Million. Psych Central. Retrieved on April 21, 2015, from http://psychcentral.com/blog/archives/2010/04/28/astrazeneca-settles-case-for-520-million/