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Post date: April 27 2010

Cuomo Announces Astrazeneca To Pay N.y. Nearly $45 Million To Settle Claims Of Off-label Drug Marketing And Kickbacks

NEW YORK, N.Y. (April 27, 2010) - Attorney General Andrew M. Cuomo today announced that New York state will receive nearly $45 million as part of a $520 million federal and multi-state settlement with AstraZeneca LP (NYSE: AZN) concerning allegations that the large pharmaceutical company provided kickbacks to doctors and engaged in an off-label marketing campaign to promote its antipsychotic drug Seroquel.

International drug manufacturer AstraZeneca allegedly paid for physicians to travel to resort locations to “advise” the company about how to market the drug for unapproved uses. The company also paid the physicians to serve as authors of articles written by AstraZeneca and its agents, and to conduct studies for unapproved uses of Seroquel. The settlement resolves claims that, as a result of these promotional activities, AstraZeneca caused physicians to prescribe Seroquel for children, adolescents and dementia patients in long-term care facilities, which are not medically accepted uses that state Medicaid programs would reimburse.

“This case is another example of a pharmaceutical company using kickbacks and deceptive practices to profit while pushing its products for unapproved uses,” said Attorney General Cuomo. “The settlement reflects the seriousness of the allegations and sends a clear message to all drug manufacturers that medicines must be marketed in a safe and fair manner.”

Seroquel is part of a newer generation of antipsychotic medications (“atypical antipsychotics”) used to treat certain psychological disorders. From January 1, 2001 through December 31, 2006, AstraZeneca promoted the sale and use of Seroquel for certain uses that the Food and Drug Administration (FDA) had not approved.

The settlement resolves an investigation into promotional activities by AstraZeneca that were directed not only to psychiatrists but also to primary care physicians and other health care 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.

While a physician can prescribe drugs for an unapproved use, federal law prohibits a manufacturer from promoting a drug for uses not approved by the FDA. Under the agreement, AstraZeneca must pay a total of $520 million in civil damages and penalties to compensate Medicaid, Medicare and various federal healthcare programs. New York state will receive nearly $45 million as part of the settlement, and other states will receive payments based on usage of Seroquel. AstraZeneca will also enter into a Corporate Integrity Agreement with the U.S. Department of Health and Human Services, Office of the Inspector General, which will closely monitor the company’s future marketing and sales practices.

This settlement is based on qui tam cases that were filed in the U.S. District Court for the Eastern District of Pennsylvania by private parties who filed actions under state and federal false claims statutes (relators). A National Association of Medicaid Fraud Control Units team participated in the investigation and conducted the settlement negotiations with AstraZeneca on behalf of all the settling states. Team members included representatives from New York, Massachusetts, Illinois, Ohio, New Jersey, Texas and California.