California Obtains Settlement on Whistle Blowing Case Against AstraZeneca

Posted by CotoBlogzz 04-27-2010

OAKLAND, CA -  The California Attorney General's office, today announced that California, along with other jurisdictions, has reached a $520 million settlement with AstraZeneca Pharmaceuticals LP, to settle allegations it engaged in the  dangerous practice of promoting drugs for unapproved uses in marketing Seroquel, its blockbuster antipsychotic drug.

London-based AstraZeneca will pay states and the federal government a total of $520 million in damages and penalties. California's share is $31 million for Medi-Cal, which provides health care to the state's poor, and other state programs.

Seroquel is an antipsychotic medication used to treat psychological disorders. From 2001 through 2006, AstraZeneca was found to have promoted the drug not only to psychiatrists, but also to primary care physicians and other healthcare professionals for unapproved uses in the treatment of medical conditions such as aggression, Alzheimer's disorder, anger management, anxiety, attention deficit hyperactivity disorder, dementia and sleeplessness.

Doctors may prescribe medications for off-label uses, but drug makers are prohibited from promoting drugs for treatment of medical conditions not approved by the Food and Drug Administration (FDA.)
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The settlement resolves claims that, as a result of these promotional activities, AstraZeneca encouraged physicians to prescribe Seroquel for children, adolescents and dementia patients in long-term care facilities for uses not medically accepted or FDA-approved. Among other side effects, the drugs have been shown to cause significant weight gain in children. The company also failed to adequately disclose studies that show Seroquel increases the risk of diabetes.

As part of the settlement, AstraZeneca will enter into a Corporate Integrity Agreement with the United States Department of Health and Human Services, Office of the Inspector General, which will closely monitor the company's marketing and sales practices.

This settlement is based on qui tam cases, or whistle-blower lawsuits, that were filed in the United States District Court for the Eastern District of Pennsylvania.

"DHCS works closely with the California Department of Justice and federal authorities to identify and recover improper payments caused by these unlawful practices. The funds recovered in this action will be put back into the Medi-Cal program to serve the medically needy citizens of this state," said DHCS Director David Maxwell-Jolly.

A National Association of Medicaid Fraud Control Units team, including members from California and other states, participated in the investigation and entered into the settlement negotiations with AstraZeneca on behalf of the states.