Dow Jones Newswires | The U.S. Justice Department on Tuesday
confirmed a settlement under which AstraZeneca PLC will pay about $520
million to resolve allegations the company improperly promoted the
A settlement has been expected since October, when
AstraZeneca booked a $520 million reserve to cover an agreement in
principle to resolve government probes of Seroquel sales and marketing
AstraZeneca reported global Seroquel sales of $4.9 billion last year, and drug-data tracker IMS Health ranked it as the fifth best-selling drug in the world.
AstraZeneca’s is the latest in a series of costly settlements drugmakers have struck to resolve government probes of so-called off-label marketing, or the promotion of drugs for uses not approved by the U.S. Food and Drug Administration.
Though doctors have the discretion to prescribe medicines for off-label uses, drugmakers are generally barred from actively promoting these uses. Authorities say off-label promotion amounts to health-care fraud because government health programs, including Medicaid, have incurred higher costs to reimburse for off-label drug use by beneficiaries.
The Seroquel deal also marks the latest settlement surrounding blockbuster antipsychotics, which comprise a big portion of Medicaid drug costs. Last year, Eli Lilly & Co. agreed to pay more than $1.4 billion and pleaded guilty to a criminal charge, admitting it promoted the antipsychotic Zyprexa for off-label uses, including to treat dementia in the elderly.
Pfizer Inc. agreed to pay $2.3 billion and plead guilty to a criminal charge last year to settle a government probe of its marketing practices. The civil portion of that pact included a government allegation that Pfizer promoted the antipsychotic Geodon off-label, though Pfizer denied that.
Officials of several states also have accused Johnson & Johnson of promoting the antipsychotic Risperdal for off-label uses and have sued to recover money paid by government health programs for the drug. Federal authorities also are probing J&J’s marketing of Risperdal.