HHS: AZ to Pay $520 Million for Off-Label Marketing
FOR IMMEDIATE RELEASE
Tuesday, April 27, 2010
Contact: HHS Press Office
PHARMACEUTICAL GIANT ASTRAZENECA TO PAY $520 MILLION FOR
OFF-LABEL DRUG MARKETING
WASHINGTON - 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 (FDA), the Departments of
Justice and Health and Human Services' Health Care Fraud Enforcement
Action Team (HEAT) announced today. 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 the FDA.
Before approving a drug, the 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.
The 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 the FDA. Specifically, between January 2001
through December 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). 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, 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.
In March 2006, AstraZeneca brought certain conduct to the attention of
the government and then cooperated in the investigation of the
allegations being settled today.
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.
"Illegal acts by pharmaceutical companies and false claims against
Medicare and Medicaid can put the public health at risk, corrupt medical
decisions by health care providers, and take billions of dollars
directly out of taxpayers' pockets," said Attorney General Eric Holder.
"This Administration is committed to recovering taxpayer money lost to
health care fraud, whether it's by bringing cases against common
criminals operating out of vacant storefronts or executives at some of
the nation's biggest companies."
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.
"Rooting out health care fraud is a top priority for the Obama
Administration, said Kathleen Sebelius, Secretary of the Department of
Health and Human Services. "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. 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
"Consumers are entitled to rely on the claims pharmaceutical companies
make about the drugs they sell," said Tony West, Assistant Attorney
General for the Civil Division of the Department of Justice. "Working
with our federal and state partners, we will protect the integrity of
our public health programs by ensuring that kickbacks from drug
companies do not taint the medical decisions of health care
"When pharmaceutical companies interfere with the FDA's mission to
insure that drugs are safe and effective, they undermine the
doctor-patient relationship and put the health and safety of patients at
risk," said Michael L. Levy, U.S. Attorney for the Eastern District of
Pennsylvania. "People have a legal right to know that pharmaceutical
companies are marketing their drugs only for uses approved by the FDA
and that their doctors' judgment has not been affected by misinformation
from a pharmaceutical company trying to boost revenues."
In addition to the civil settlement agreement, resolution of the matter
includes a Corporate Integrity Agreement (CIA) between AstraZeneca and
the Office of Inspector General of the Department of Health and Human
Services. The five-year CIA 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 subject
to exclusion from Federal health care programs, including Medicare and
Medicaid, for a material breach of the CIA 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
Department of Health and Human Services Inspector General Daniel R.
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 today's 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 the HEAT initiative, which was announced
by Attorney General Holder and Secretary Sebelius in May 2009. The
partnership between the two departments has focused efforts to reduce
and prevent Medicare and Medicaid fraud through enhanced cooperation.
One of the most powerful tools in that effort is the FCA, which the
Justice Department has used to recover almost $2.8 billion since January
2009 in cases involving fraud against federal health care programs. The
Justice Department's total recoveries in FCA cases since January 2009
are over $3.75 billion.
The civil settlement was reached by the U.S. Attorney's Office for the
Eastern District of Pennsylvania and the Commercial Litigation Branch of
the Justice Department's Civil Division. This investigation was
conducted by the Department of Health and Human Services Office of
Inspector General, U.S. Postal Service's Office of Inspector General and
the FDA's Office of Criminal Investigations. Assistance was provided by
representatives of FDA's Office of Chief Counsel and the National
Association of Medicaid Fraud Control Units.