AstraZeneca agreed to pay $355 million in criminal and civil penalties to settle fraud allegations and pleaded guilty to criminal violations of the Prescription Drug Marketing Act. The settlement was announced by the U.S. attorney's office in Wilmington, Del., after the plea was filed in U.S. District Court there. AstraZeneca has its U.S. headquarters in Wilmington. Company representatives allegedly taught physicians how to bill Medicare and other payers for free and low-priced offerings of AstraZeneca's prostate cancer drug Zolodex as part of a program to switch prescriptions from a rival drug, Lupron, made by TAP Pharmaceutical Products. AstraZeneca will pay $63.9 million in criminal fines, $266.1 million in civil penalties to resolve a False Claims Act lawsuit and $24.9 million to reimburse state Medicaid programs in relation to the false-claims lawsuit. It also will sign a five-year corporate integrity agreement. In a written statement AstraZeneca said, "We accept responsibility for any improper sampling conduct that took place in the mid-1990s and have taken steps . . . to prevent such activities from happening again."
The false-claims suit, in which the company did not admit legal wrongdoing, was brought by a former executive at both TAP and AstraZeneca, Douglas Durand. He accused AstraZeneca of inflating the average wholesale price used to calculate government reimbursement for drugs. Durand will receive $47.5 million of the civil recovery. TAP settled a similar case in October 2001 and paid $875 million in civil and criminal fines, the largest single healthcare fraud settlement in U.S. history. -- by Mark Taylor