The Magazine of Corporate Responsibility

AstraZeneca to Pay $520 Million to Settle Illegal Marketing Charges

by Michael Connor

AstraZeneca LLP said it had agreed to pay $520 million to settle civil charges that it had illegally marketed the anti-psychotic drug Seroquel for so-called “off-label” uses not approved by the U.S. Food and Drug Administration.

Seroquel TabletsU.S. Attorney General Eric Holder said the settlement was the largest amount ever paid by a company in a civil only settlement of off-label marketing claims. The federal government will receive $302 million, and states will share up to $218 million.

The FDA originally approved AstraZeneca’s Seroquel in September 1997 for the treatment of manifestations of psychotic disorders and later amended that approval to include specific conditions related to bipolar disorder and depression.

However, according to federal prosecutors, from 2001 through 2006 “AstraZeneca promoted Seroquel to psychiatrists and other physicians for certain uses that were not approved by the 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).”

According to the settlement, “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.”

Corporate Integrity Agreement

AstraZeneca, which last year announced an agreement in principle to settle with the government, yesterday released a statement in which it “denies” the charges but confirmed the settlement.  The company said it has entered into a corporate integrity agreement with the Office of Inspector General of the United States Department of Health and Human Services. The corporate integrity agreement will be in effect for five years.

The Justice Department said the corporate integrity 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 website information about payments to doctors, such as honoraria, travel or lodging."

AstraZeneca is only the latest pharmaceutical company charged by the U.S. with illegal marketing of drugs.

In September 2009, Pfizer and its subsidiary, Upjohn, agreed to pay $2.3 billion in fines - and plead guilty to a crime - to settle federal and state charges regarding promotion of the painkiller Bextra and three other drugs.  In January 2009, Eli Lilly agreed to pay $1.415 billion to resolve allegations of off-label promotion of the drug Zyprexa.  And in September 2007, Bristol-Meyers Squibb agreed to pay more than $515 million to settle charges of illegal marketing and pricing of the drug Abilify.

Attorney General Holder said that over the past 15 months, the government has recouped more than $2.8 billion in health care fraud cases through use of the U.S. False Claims Act.  In 2009, the Justice Department also reached an all-time high in the number of health care fraud defendants charged, with more than 800 indictments and more than 580 convictions.

Only last week, a group of 32 U.S. medical societies with membership of more than 650,000 physicians announced a new ethics code intended to address possible conflicts between physicians and private sector companies.

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