AstraZeneca sets aside $350m in fraud case
pharmafile | October 24, 2003 | News story | |
AstraZeneca has set aside $350 million to cover costs relating to its alleged defrauding of the US Medicare and Medicaid schemes.
The company is alleged to have made improper claims for its prostate cancer treatment Zoladex in the mid 1990s, in a ruse similar to that of TAP Pharmaceutical Products and its rival prostate cancer drug Lupron.
TAP pleaded guilty to and was fined a record $884 million in 2001 for conspiring with doctors to falsely claim for Lupron from the two health insurance schemes after it had given the doctors the drug free of charge.
AstraZeneca is in negotiations with US state and federal authorities over the potential settlement. It said: "Although no final agreement has been concluded, the company believes it appropriate to accrue $350 million to cover estimated settlement costs".
Although the allegation against AstraZeneca was made in 1997 following evidence heard in the TAP trial, the Anglo-Swedish company only disclosed the information last year.
The news overshadowed AstraZeneca's financial results, which showed the company coping well with generic sales erosion to three of its key products, ulcer drug Losec, hypertension treatment Zestril and breast cancer treatment Nolvadex.
Fourth quarter sales rose 10% to $4.9 billion while full year revenue rose 9% to $17.8 billion. Operating profit was $1.1 billion (-2%) and $4.4 billion (5%) respectively.
Discounting Losec, sales rose 23%, with the drug's follow-up, Nexium, generating almost $2 billion for the year. It now has over one-fifth of total PPI prescriptions in the US and is the number two PPI for new prescriptions.
Atypical antipsychotic Seroquel was another strong performer, rising 67% for the year to $1.1 billion.
Geographically, sales dropped in both Germany and the UK, but strong performance in France and Italy led to a 5% rise in European revenue. US sales rose 10% and now accounts for over half the company's annual revenue.
Following its launch in Japan in the third quarter of last year, lung cancer drug Iressa has generated $67 million in sales. The FDA's review of the drug has now been extended until the 5 May.
The company has two further launches scheduled for this year, delayed cholesterol treatment Crestor, and anti-clotting drug Exanta.
