Pharmaceutical Giant to Pay $520 Million for Off-label Drug Marketing

AstraZeneca LP and AstraZeneca Pharmaceuticals LP will pay $520 million to resolve allegations that AstraZeneca illegally marketed the anti-psychotic drug Seroquel for uses not approved as safe and effective by the Food and Drug Administration. Such unapproved uses are also known as "off-label" uses because they are not included in the drug's FDA-approved product label.

The Wilmington, Del.-based company 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.

Under the terms of the settlement, the federal government will 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.

Under the Food, Drug and Cosmetic Act, a company must specify the intended uses of a product in its new drug application to FDA. Before approving a drug, FDA must determine that the drug is safe and effective for the use proposed by the company. Once approved, the drug may not be marketed or promoted for off-label uses.

FDA originally approved Seroquel in September 1997 for the treatment of manifestations of psychotic disorders. In September 2000, FDA proposed narrowing the approval for Seroquel to the short term treatment of schizophrenia only. In January 2004, the FDA approved Seroquel for short term treatment of acute manic episodes associated with bipolar disorder (bipolar mania). In October 2006, the FDA approved Seroquel for bipolar depression.

The United States alleges that AstraZeneca illegally marketed Seroquel for uses never approved by FDA. Specifically, plaintiffs say that between January 2001 through December 2006, AstraZeneca promoted Seroquel to psychiatrists and other physicians for certain uses that were not approved by FDA as safe and effective (including aggression, Alzheimer’s disease, anger management, anxiety, attention deficit hyperactivity disorder, bipolar maintenance, dementia, depression, mood disorder, post-traumatic stress disorder, and sleeplessness). These unapproved uses were not medically accepted indications for which the United States and the state Medicaid programs provided coverage for Seroquel.

According to the settlement agreement announced April 27, AstraZeneca targeted its illegal marketing of the anti-psychotic Seroquel toward 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.

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

The United States contends that AstraZeneca promoted the unapproved uses by improperly and unduly influencing the content of, and speakers in, company-sponsored continuing medical education programs. The company also engaged doctors to give promotional speaker programs on unapproved uses for Seroquel and to conduct studies on unapproved uses of Seroquel. In addition, the company recruited doctors to serve as authors of articles that were ghostwritten by medical literature companies and about studies the doctors in question did not conduct. AstraZeneca then used those studies and articles as the basis for promotional messages about unapproved uses of Seroquel.

The United States also contends that AstraZeneca violated the federal Anti-Kickback Statute by offering and paying illegal remuneration to doctors it recruited to serve as authors of articles written by AstraZeneca and its agents about the unapproved uses of Seroquel. AstraZeneca also offered and paid illegal remuneration to doctors to travel to resort locations to "advise" AstraZeneca about marketing messages for unapproved uses of Seroquel, and paid doctors to give promotional lectures to other health care professionals about unapproved and unaccepted uses of Seroquel. The United States contends that these payments were intended to induce the doctors to prescribe Seroquel for unapproved uses in violation of the federal Anti-Kickback Statute.

"Today’s settlement sends a clear warning to any individual or company seeking to defraud our health care system and returns hundreds of millions of dollars of taxpayer money to the Medicare trust fund where they belong," said Kathleen Sebelius, secretary of the Department of Health and Human Services. "It reflects the unprecedented energy, resources, and new ideas that this administration has devoted to identifying, prosecuting, and ultimately preventing health care fraud. With the new anti-healthcare fraud resources in the Affordable Care Act, there has never been a worse time to try to steal from our health care system."

In addition to the civil settlement agreement, resolution of the matter includes a Corporate Integrity Agreement between AstraZeneca and the DHHS Office of Inspector General. The five-year agreement 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 Web site 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 agreement and subject to monetary penalties for less significant breaches.

"As a result of this Corporate Integrity Agreement, the actions of AstraZeneca will be more transparent, its Board of Directors held more accountable, and the names of physicians receiving payments will be disclosed -- all leading to better protection for patients," said DHHS Inspector General Daniel R. Levinson.

The government's investigation was triggered by a whistleblower lawsuit filed under the FCA's qui tam provisions in the Eastern District of Pennsylvania. As part of the resolution, James Wetta, the whistleblower in that action, will receive more than $45 million from the federal share of the civil recovery.

This settlement is part of the government’s emphasis on combating health care fraud and another step for DHHS' Health Care Fraud Enforcement Action Team (HEAT) initiative, which began in May 2009. The partnership between the Department of Justice and DHHS has focused efforts to reduce and prevent Medicare and Medicaid fraud through enhanced cooperation. The civil settlement was reached by the U.S. Attorney’s Office for the Eastern District of Pennsylvania and the Commercial Litigation Branch of DOJ's Civil Division.

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