For Immediate Release - April 27, 2010

AG Coakley's Office Secures $18 Million Through Settlement with Atypical Anti-Psychotic Drug Maker AstraZeneca

Coalition of Government Entities Reaches $458 Million Settlement with Drug Company over Improper Marketing of psychiatric drug Seroquel

BOSTON - Pharmaceutical company AstraZeneca L.P. will pay $18.8 million to the Massachusetts Medicaid Program to resolve allegations that the company improperly marketed an atypical anti-psychotic drug commonly used for the treatment of adults suffering from schizophrenia and certain forms of bipolar disorder, Attorney General Martha Coakley's Office announced today.

AG Coakley's office took a leading role in negotiating this national settlement with the Delaware-based pharmaceutical manufacturer. The settlement resolves allegations that the company improperly marketed the atypical antipsychotic drug Seroquel. The settlement resolves claims that, as a result of these marketing activities, AstraZeneca caused physicians to prescribe Seroquel for children, adolescents and dementia patients in long-term care facilities, which are uses that were not approved by the Food and Drug Administration (FDA) as safe and effective.

The payment to Massachusetts is part of a national settlement that will return more than $458 million to Medicaid programs nationwide and an additional $61 million to other federal health care programs. The Massachusetts Medicaid Program provides funds for health care products and services for eligible low-income individuals, including elder citizens, children and people with disabilities.

AG Coakley is playing a leading role in the investigation and prosecution of cases involving the use of kickbacks and other illegal marketing of anti-psychotic drugs. Last month, her office joined a federal lawsuit against Johnson and Johnson alleging that the company provided kickbacks in order to promote the use of its atypical anti-psychotic drug Risperdal in nursing homes.

"AstraZeneca's improper marketing of Seroquel put thousands of patients-including children and seniors--at risk, and resulted in millions of dollars in overpayments by the Massachusetts Medicaid Program," said AG Coakley. "Our office takes very seriously any allegations that drug companies are putting profits ahead of appropriate patient care. We will continue to work with other states and our federal partners to scrutinize marketing conduct in the pharmaceutical industry, particularly with respect to the off-label prescribing of drugs."

AstraZeneca is an international pharmaceutical manufacturer incorporated in Delaware, with its U.S. headquarters located in the same state. AstraZeneca's Seroquel is one of a class of drugs designated as atypical anti-psychotics, and is approved by the FDA for the treatment of adults suffering from schizophrenia and certain forms of bipolar disorder. Today's settlement is based on two whistleblower lawsuits filed in federal court in Philadelphia, both of which alleged that AstraZeneca employed illegal off-label marketing schemes and paid improper kickbacks to promote the sales of Seroquel.

This settlement is the result of a joint federal-state investigation, and resolves allegations that, from 2001 through 2006, AstraZeneca promoted the sale and use of Seroquel for a wide range of uses that the FDA had not approved, and that the company improperly engaged in promotional activities that were directed not only to psychiatrists, but also to primary care physicians and other health care professionals. Off-label prescribing of pharmaceutical products by physicians is a common practice and is not unlawful, but the U.S. Food, Drug and Cosmetic Act prohibits pharmaceutical manufacturers from promoting off-label uses of their products. The settlement addresses these off-label claims only, and does not release AstraZeneca from liability for consequential damages, including claims arising from adverse health effects suffered by Medicaid recipients or other health care consumers as a result of taking Seroquel. Adverse health effects can include weight gain or tardive dyskinesia.

The investigation focused specifically on allegations that AstraZeneca sales and marketing personnel improperly promoted sales of Seroquel 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. In implementing its marketing campaign, AstraZeneca was also alleged to have made improper payments to physicians, paying their way to travel to resort locations to advise the company about marketing messages for unapproved uses, to serve as authors of articles written by AstraZeneca and its agents, and to conduct studies for unapproved uses of Seroquel.

In addition to the civil settlements, AstraZeneca has agreed to the terms of a detailed and comprehensive Corporate Integrity Agreement (CIA) to be administered by the Office of Inspector General of the U.S. Department of Health and Human Services, under which its sales and marketing of Seroquel going forward will be strictly monitored.

AG Coakley's Office reached this agreement working in cooperation with the United States Attorney's Office for the Eastern District of Pennsylvania, the United States Department of Justice, the Office of Inspector General of the U.S. Department of Health and Human Services and representatives of the attorneys general of the states of New York, Ohio, Illinois, Texas, New Jersey and California.

AG Coakley's office has established itself nationally as a leader in the fight against fraud, waste and abuse in the Medicaid program. The office's Medicaid Fraud Division works to prevent and if necessary, prosecute provider fraud and violations of state law pertaining to fraud in the administration of the Medicaid Program. The division often works collaboratively with other enforcement authorities in other states, as well as with federal enforcement authorities. Since Attorney General Coakley took office in 2007, the Medicaid Fraud Division has recovered over $134 million dollars for the Massachusetts Medicaid program. In 2009, the division achieved its third consecutive year of record-breaking recoveries, returning $51.6 million to the Medicaid Program, including multi-million dollar settlements with such pharmaceutical giants as Astra Zeneca, Eli Lilly & Co., and Pfizer Inc.

Assistant Attorney General Robert Patten of AG Coakley's Medicaid Fraud Division served as one of the lead negotiators on behalf of the states in this national settlement. He was assisted by Data Analyst Anthony Megathlin, also of the Medicaid Fraud Division, and by Assistant Attorneys General and data analysts from New York, Ohio, Illinois, Texas, New Jersey and California.