AstraZeneca pays $110 million to Texas to settle whistleblower charges of false marketing of antispychotic Seroquel and statin Crestor

Pharmaceutical company AstraZeneca will  pay $110 million to the state of Texas to settle lawsuits alleging that the company falsely and misleadingly marketed two of its drugs in violation of the Texas Medicaid Fraud Prevention Act. AstraZeneca was accused of engaging in false and misleading marketing schemes at a time when the company was under the strict obligations of a 2010 federal “corporate integrity agreement” resulting from prior allegations of Medicaid fraud. The federal agreement prohibited Astra Zeneca from promoting its antipsychotic medication Seroquel and cholesterol-lowering statin drug Crestor for uses not approved by the FDA, but Texas alleged the company continued to do so anyway. Such illegal pharmaceutical promotion is commonly referred to as “off-label marketing.”

AstraZeneca allegedly promoted its  antipsychotic drug to Texas Medicaid providers, who primarily treated children and adolescents when those drugs were not approved as safe and effective for use in that vulnerable population. Attorney General Paxton’s office accused AstraZeneca of making hundreds of thousands of dollars in illegal payments to two former state hospital doctors to unduly influence the use of Seroquel in the state hospital system.

The company was also accused of a similar nationwide marketing fraud scheme involving Crestor, including allegations that AstraZeneca executed a plan of deception targeted directly at Texas Medicaid to expand the use of the statin beyond what the science supported, while downplaying a significant risk of diabetes in certain patients.

In this case, there were four whistleblowers: Layne Foote and Mark Lorden represented by Blank Rome and Baron & Budd in Washington DC; Rosemarie De Souza represented by Berg & Androphy of Texas and Kenneth McDonough, M.D. represented by Duane Morris LLP of Philadelphia.  The first settlement, totaling $90 million, resolves allegations that AstraZeneca targeted the Texas Medicaid system with a fraudulent marketing scheme for its expensive and powerful atypical antipsychotic drugs Seroquel IR and Seroquel XR from 2007 through 2010. The second settlement for $20 million resolves allegations that AstraZeneca misrepresented and concealed information about the safety, efficacy and appropriate use of its drug Crestor to the Texas Medicaid system. AstraZeneca has denied any wrongdoing in both cases.