Pharmaceutical Giant AstraZenaca to Pay $520 Millionj for Off-Label Drug Marketing

AstraZeneca LP and AstraZeneca Pharmaceuticals LP will pay $520 million to resolve allegations that AstraZeneca illegally marketed the anti-psychotic drug Seroquel for uses not approved as safe and
effective by the Food and Drug Administration (FDA), the Departments of Justice and Health and Human Services' Health Care Fraud Enforcement Action Team (HEAT) announced today. Such unapproved uses are also known as "off-label" uses because they are not included in the drug's FDA
approved product label.

The Wilmington, Del.-based company signed a civil settlement to resolve allegations that by marketing Seroquel for unapproved uses, the company caused false claims for payment to be submitted to federal insurance programs including Medicaid, Medicare and TRICARE programs, and to the Department of Veterans Affairs, the Federal Employee Health Benefits Program and the Bureau of Prisons.

Under the terms of the settlement, the federal government will receive $301,907,007 from the civil settlement, and the state Medicaid programs and the District of Columbia will share up to $218,092,993 of the civil settlement, depending on the number of states that participate in the
settlement. The allegations were originally brought in a lawsuit under the qui tam or whistleblower provisions of the False Claims Act and various state False Claims Act statutes.

Under the Food, Drug and Cosmetic Act, a company must specify the intended uses of a product in its new drug application to the FDA. Before approving a drug, the FDA must determine that the drug is safe and effective for the use proposed by the company. Once approved, the drug may not be marketed or promoted for off-label uses.

The FDA originally approved Seroquel in September 1997 for the treatment of manifestations of psychotic disorders. In September 2000, FDA proposed narrowing the approval for Seroquel to the short term treatment of schizophrenia only. In January 2004, the FDA approved Seroquel for short term treatment of acute manic episodes associated with bipolar disorder (bipolar mania). In October 2006, the FDA approved Seroquel for bipolar depression.

The United States alleges that AstraZeneca illegally marketed Seroquel for uses never approved by the FDA. Specifically, between January 2001 through December 2006, AstraZeneca promoted Seroquel to psychiatrists and other physicians for certain uses that were not approved by the FDA as safe and effective (including aggression, Alzheimer's disease, anger management, anxiety, attention deficit hyperactivity disorder, bipolar maintenance, dementia, depression, mood disorder, post-traumatic stress disorder, and sleeplessness). These unapproved uses were not medically accepted indications for which the United States and the state Medicaid programs provided coverage for Seroquel.

According to the settlement agreement, AstraZeneca targeted its illegal marketing of the anti-psychotic Seroquel towards doctors who do not typically treat schizophrenia or bipolar disorder, such as physicians who treat the elderly, primary care physicians, pediatric and adolescent physicians, and in long-term care facilities and prisons.

In March 2006, AstraZeneca brought certain conduct to the attention of the government and then cooperated in the investigation of the allegations being settled today.

The United States contends that AstraZeneca promoted the unapproved uses by improperly and unduly influencing the content of, and speakers, in company-sponsored continuing medical education programs. The company also engaged doctors to give promotional speaker programs on unapproved
uses for Seroquel and to conduct studies on unapproved uses of Seroquel. In addition, the company recruited doctors to serve as authors of articles that were ghostwritten by medical literature companies and about studies the doctors in question did not conduct. AstraZeneca then used those studies and articles as the basis for promotional messages about unapproved uses of Seroquel.

"Illegal acts by pharmaceutical companies and false claims against Medicare and Medicaid can put the public health at risk, corrupt medical decisions by health care providers, and take billions of dollars
directly out of taxpayers' pockets," said Attorney General Eric Holder. "This Administration is committed to recovering taxpayer money lost to health care fraud, whether it's by bringing cases against common criminals operating out of vacant storefronts or executives at some of the nation's biggest companies."

The United States also contends that AstraZeneca violated the federal Anti-Kickback Statute by offering and paying illegal remuneration to doctors it recruited to serve as authors of articles written by
AstraZeneca and its agents about the unapproved uses of Seroquel. AstraZeneca also offered and paid illegal remuneration to doctors to travel to resort locations to "advise" AstraZeneca about marketing
messages for unapproved uses of Seroquel, and paid doctors to give promotional lectures to other health care professionals about unapproved and unaccepted uses of Seroquel. The United States contends that these payments were intended to induce the doctors to prescribe Seroquel for
unapproved uses in violation of the federal Anti-Kickback Statute.

"Rooting out health care fraud is a top priority for the Obama Administration, said Kathleen Sebelius, Secretary of the Department of Health and Human Services. "Today's settlement sends a clear warning to any individual or company seeking to defraud our health care system and returns hundreds of millions of dollars of taxpayer money to the Medicare trust fund where they belong. It reflects the unprecedented energy, resources, and new ideas that this administration has devoted to
identifying, prosecuting, and ultimately preventing health care fraud. With the new anti-healthcare fraud resources in the Affordable Care Act, there has never been a worse time to try to steal from our health care system."

"Consumers are entitled to rely on the claims pharmaceutical companies make about the drugs they sell," said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice. "Working with our federal and state partners, we will protect the integrity of our public health programs by ensuring that kickbacks from drug companies do not taint the medical decisions of health care professionals."

"When pharmaceutical companies interfere with the FDA's mission to insure that drugs are safe and effective, they undermine the doctor-patient relationship and put the health and safety of patients at
risk," said Michael L. Levy, U.S. Attorney for the Eastern District of Pennsylvania. "People have a legal right to know that pharmaceutical companies are marketing their drugs only for uses approved by the FDA and that their doctors' judgment has not been affected by misinformation from a pharmaceutical company trying to boost revenues."

In addition to the civil settlement agreement, resolution of the matter includes a Corporate Integrity Agreement (CIA) between AstraZeneca and the Office of Inspector General of the Department of Health and Human Services. The five-year CIA requires, among other things, that a board
of directors committee annually review the company's compliance program and certify its effectiveness; that certain managers annually certify that their departments or functional areas are compliant; that AstraZeneca send doctors a letter notifying them about the settlement; and that the company post on its website information about payments to doctors, such as honoraria, travel or lodging. AstraZeneca is subject to exclusion from Federal health care programs, including Medicare and Medicaid, for a material breach of the CIA and subject to monetary penalties for less significant breaches.

"As a result of this Corporate Integrity Agreement, the actions of AstraZeneca will be more transparent, its Board of Directors held more accountable, and the names of physicians receiving payments will be disclosed -- all leading to better protection for patients," said Department of Health and Human Services Inspector General Daniel R. Levinson.

The government's investigation was triggered by a whistleblower lawsuit filed under the FCA's qui tam provisions in the Eastern District of Pennsylvania. As part of today's resolution, James Wetta, the
whistleblower in that action, will receive more than $45 million from the federal share of the civil recovery.

This settlement is part of the government's emphasis on combating health care fraud and another step for the HEAT initiative, which was announced by Attorney General Holder and Secretary Sebelius in May 2009. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid fraud through enhanced cooperation. One of the most powerful tools in that effort is the FCA, which the Justice Department has used to recover almost $2.8 billion since January
2009 in cases involving fraud against federal health care programs. The Justice Department's total recoveries in FCA cases since January 2009 are over $3.75 billion.

The civil settlement was reached by the U.S. Attorney's Office for the Eastern District of Pennsylvania and the Commercial Litigation Branch of the Justice Department's Civil Division. This investigation was conducted by the Department of Health and Human Services Office of Inspector General, U.S. Postal Service's Office of Inspector General and the FDA's Office of Criminal Investigations. Assistance was provided by representatives of FDA's Office of Chief Counsel and the National
Association of Medicaid Fraud Control Units.

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Top 10 Facts About House Democrats' 852-Page Government Takeover of Health Care

House Democrats today (June 19) unveiled their long-awaited health care “reform” legislation, and it’s just what the American people expected: an 852-page bureaucratic nightmare that rations care, raises taxes, and empowers government bureaucrats – not patients and doctors – to make critical medical decisions.

As House Republican Leader John Boehner (R-OH) warned middle-class families and small businesses earlier today, “This plan will make health care more expensive, reduce the quality of care for millions of families and small businesses, cost American jobs, and force untold millions of Americans off their current plans and into a government-run nightmare operated by federal bureaucrats.” As Democrats prepare to defend their government takeover of health care in a series of committee hearings next week, here are the latest Top 10 facts about the House Democrats’ health care proposal:

1. Democrats’ Government Takeover Will Cost Middle-Class Families and Small Businesses Billions. Though House Democrats don’t know (or won’t say) how much their government takeover will cost, here’s what we do know: the plan will make health care more expensive and hit the middle class particularly hard with higher taxes, rationed care, and new health care costs. As millions of families and small businesses are struggling to make ends meet while making responsible choices, this plan forces those that make responsible decisions to foot the bill for those who don’t.

2. Democrats’ Government Takeover Will Cost Tens of Millions Their Current Health Care Coverage. The House Democrats’ plan could force more than 100 million Americans out of their current health care plan and onto the government rolls, according to a Lewin Group study published earlier this year. A Congressional Budget Office report on a similar plan authored by Senate Democrats that would force at least 23 million Americans off of their current plans. According to the Associated Press, even the White House admits that the President’s promises about allowing the American people to keep their health care shouldn’t be taken literally.

3. Democrats’ Government Takeover Will Cost Millions of Americans Their Jobs. The House Democrats’ plan would impose employer mandates and cost jobs by requiring some employers – especially some small businesses – to pay a new eight percent tax to Washington. The plan would also slap employers that are unable to offer coverage the government deems adequate with another new financial burden. These two new taxes will make it more difficult than ever for small business owners to reinvest in their businesses and create and retain good paying jobs. Using the economic model of the President’s own economic advisors, an employer mandate would result in 4.7 million Americans losing their jobs.

4. Democrats’ Government Takeover Will Put Bureaucrats in Charge of Key Medical Decisions. Instead of keeping patients and doctors in charge of key medical decisions, the House Democrats’ plan will give Washington the power instead. And if you’re outraged with what Washington’s done with the bailouts, just wait until you see what Uncle Sam does with your health care.

5. Democrats’ Government Takeover Will Cost Future Generations Money They Don’t Have. The House Democrats’ bill simply shifts the burden of debt from one generation to the next. Our nation can’t sustain the Medicaid and Medicare programs now. At a time when families and small businesses already are being crushed under the weight of historic debt, a new government-run program will only further add to the bill passed along to our children and grandchildren.

6. Democrats’ Government Takeover Will Cost Seniors Key Medicare Benefits and Options. In order to expand health care benefits to some seniors, House Democrats will slash coverage millions of other seniors depend on. These benefit cuts will ultimately eliminate choices for seniors.

7. Democrats’ Government Takeover Will Place a New Mandate on Individuals. The House Democrats’ plan mandates that every American buy health insurance or pay a hefty penalty to Washington equal to almost two percent of their income. This would force more Americans into government-run system that will make health care more expensive, ration care, and put bureaucrats in charge of medical decisions.

8. Democrats’ Government Takeover Will Raise Taxes on Families, Small Businesses. Energy & Commerce Committee Chairman Henry Waxman (D-CA) readily admitted that the Democrats’ health care “reform” plan would be financed with tax hikes. The Associated Press reported that, “Democrats are considering everything from taxing soda, to raising income taxes on upper income people earning more than $200,000, to a federal sales tax.” Exactly how many new taxes will there be to bankroll this government takeover? When do Democrats plan to reveal them?

9. Democrats’ Government Takeover Is a Missed Opportunity To Reduce Health Care Costs. The House Democrats’ plan does not include even a shred of medical liability reform, missing an opportunity to drive down health care costs by reducing costly, unnecessary defensive medicine practiced by doctors trying to protect themselves from trial lawyers.

10. Democrats’ Government Takeover Harms Small Businesses, Costs Jobs. The House Democrats’ plan uses the amount of an employer’s annual payroll to define “small business,” which is troubling news for millions of Americans who depend on these engines of economic growth. Based on the Democrats’ definition of small businesses only those with, on average, less than 10 employees will be spared from new taxes through employer mandates. This leaves a huge number of small businesses to deal with the onerous and expensive mandates of the House Democrats’ government defined health benefit plan (“small businesses” are traditionally defined as employing less than 500 people). These small businesses employ 47.3 million employees and provide those employees $1.7 trillion in wages annually. The House Democrats’ new employer mandate and taxes on these businesses will make it more difficult to retain these jobs and wages.

Rationing care, raising taxes, and putting bureaucrats in charge of key health care decisions is not “reform.” There is a better way. Led by Rep. Roy Blunt (R-MO) and his Health Care Reform Solutions Group, House Republicans have outlined a plan to expand access to affordable, quality care regardless of pre-existing conditions; protect Americans from being forced into a government-run plan, making certain that medical decisions are made by patients and their doctors, not Washington bureaucrats; and let Americans who like their health care coverage keep it, while giving all Americans the freedom to choose the plan that best meets their needs. Will Democrats barrel ahead with their costly government takeover? Or will they heed the President’s words to bring all stakeholders to the table to ensure real health care reform?

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