AZ settles $355m fraud case
pharmafile | October 29, 2003 | News story | |
AstraZeneca has settled the case relating to fraudulent sales of its prostate cancer drug Zoladex, and will pay a total of $354.9 million.
The company has agreed to plead guilty to charges that it violated the US Prescription Drug Marketing Act between 1993 and 1996 by providing free samples of Zoladex to doctors, knowing that they would then seek reimbursement from the Government's Medicare system.
It will pay a criminal fine of $63.9 million, $266.1 million to the US Government for claims filed with Medicare and other reimbursement schemes, and $24.9 million to US and state governments for state Medicare claims.
"FDA will not tolerate criminal conduct that exploits patients, plunders the national treasury, and adds to the cost of health care", said FDA Commission Dr Mark McClellan. "[This] sends a strong message that the FDA will enforce the laws, and take vigorous actions against those who defraud consumers and abuse the health care system".
The fraudulent practice was similar to one undertaken by TAP Pharmaceuticals relating to its prostate cancer drug Lupron, which led to a record fine of $884 million in 2001.
AstraZeneca will also settle, without admissions of liability, that it provided inducement to doctors to buy Zoladex and inflated the drug's reported price to the federal Medicare scheme.
It has also agreed to take part in a five-year 'Corporate Integrity Agreement' with the Office of Inspector General for the Department of Public Health and Human Services. As part of this, AstraZeneca will have to provide periodic reports on its compliance activities.
In April, GlaxoSmithKline and Bayer agreed to pay $344 million for defrauding the Medicaid system, while GSK, along with Pharmacia and Aventis, is also facing legal action for alleged bribery and inflation of drug prices in the US.
