Recently, AstraZeneca Plc agreed to pay $110 million to settle two Texas claims that alleged the company cheated Texas’ Medicaid program by fraudulently marketing two medications, Seroquel and Crestor.
In the lawsuit filed in 2013, the company was accused of promoting its Seroquel antipsychotic for treating children and teenagers when the drug was not approved for that population, in addition to paying kickbacks to two former state hospital doctors so they would prescribe the pill. AstraZeneca was also accused of marketing its Crestor cholesterol pill for unapproved uses and downplaying risk of diabetes in some patients. These actions were alleged to have gone on as far back as 2007.
AstraZeneca was allegedly running these schemes despite being subject to a 2010 federal corporate integrity agreement as a result of prior allegations of health care fraud. The CIA barred the company from promoting either medication for unapproved FDA uses.
The five-year CIA AstraZeneca was under required, 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. The CIA also noted that AstraZeneca was to be 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.
“Texas leads the country in protecting its Medicaid system from pharmaceutical fraud,” Texas Attorney General Ken Paxton said. “The allegations that led to this settlement are especially disturbing because the well-being of children and the integrity of the state hospital system were jeopardized. The cooperation and support of the Texas Health and Human Services Commission was essential in achieving this outstanding outcome for Texans.”
“AstraZeneca makes no concessions or admissions of fault in the settlement agreements,’’ the company said in a statement. “While AstraZeneca denies the allegations, it is in the best interests of the company to resolve these matters and to move forward.’’
Of the $110 million in total settlements, about $45.8 million will go to the state of Texas; the United States government will receive $32.8 million to cover the federal taxpayer’s share; and the remaining $31.4 million will go to six whistleblowers who provided information to Texas officials about AstraZeneca’s practices.
AstraZeneca has paid more than $1.3 billion to settle claims related to Seroquel and the company faces yet another whistleblower suit filed in federal court in Delaware on behalf of the United States and multiple individual states. That case, which alleges nationwide fraudulent marketing of Seroquel, was stayed pending the result of the Texas attorney general’s claim. While doctors have wide discretion to prescribe drugs beyond what they’ve been approved to treat, drug makers are forbidden from the practice.