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Drug maker AstraZeneca agrees to pay $110M to settle Texas Medicaid fraud claims

August 09, 2018, Dallas, TX — Pharmaceutical giant AstraZeneca will pay $110 million to settle a pair of whistle-blower lawsuits accusing the company of falsely marketing two of its drugs to Texas Medicaid providers, including illegally promoting a powerful antipsychotic medicine for use by children.

The cases were filed in 2013 by Texas Attorney General Ken Paxton’s office, which accused the United Kingdom-based drug maker of “off-label marketing” of Crestor, a cholesterol medicine, and Seroquel, an antipsychotic drug used to treat conditions like schizophrenia and bipolar disorder. The state initially sought $5 billion in its lawsuit.

As far back as 2007, AstraZeneca allegedly marketed Seroquel to Texas Medicaid providers who primarily treated children at a time when the drug had not been approved as safe for patients under 18. That included hundreds of thousands of dollars in illegal payments to two former state hospital doctors to influence the use of the drug, as well as misrepresenting the drug’s potency and side effects, according to the attorney general’s office.

AstraZeneca was also accused in a nationwide marketing fraud scheme involving the statin Crestor, which lowers cholesterol levels by blocking certain enzymes.

Paxton’s office said AstraZeneca “executed a plan of deception” to expand the use of Crestor beyond what was supported by science, while minimizing the risk of side effects for certain patients.

The alleged violations came while AstraZeneca was operating under a 2010 federal corporate integrity agreement that prohibited the company from marketing certain drugs for uses not approved by the FDA.

In the cases brought by the Texas Attorney General, AstraZeneca agreed to pay $90 million to settle the claims related to Seroquel and $20 million to settle the Crestor claims.

In a settlement agreement released Tuesday, the company did not admit wrongdoing and continued to deny the allegations brought in the case.

"It is in the best interests of the company to resolve these matters and to move forward with our business of discovering and developing important, life-changing medicines while avoiding the delay, uncertainty, and expense of protracted litigation," the company said in a statement.

Of the $110 million in total settlements, about $45.8 million will go to the state of Texas to cover the taxpayer’s share of expenses and state attorney costs. The U.S. government will receive $32.8 million to cover the federal taxpayer’s share and the remaining $31.4 million will go to six whistle-blowers who provided information to Texas officials about AstraZeneca’s practices.

AstraZeneca has paid more than $1.3 billion to settle Seroquel-related lawsuits, according to Bloomberg, and is facing multiple other federal lawsuits related to the drug. Seroquel brought in as much as $5 billion in revenues for AstraZeneca in prior years, but sales declined to $511 million in 2017 due the drug's patent expiring.

Source: The Dallas Morning News

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