Another Big Pharma Payout – But Is It Enough?

Following big settlements against Eli Lilly and Pfizer for unlawful, off-label marketing of Zyprexa and Geodon respectively, the U.S. Department of Justice this week announced a settlement with AstraZeneca with regard to its atypical antipsychotic, Seroquel. As part of the settlement, the company has agreed to pay $520 million. The Wilmington, Del.-based pharmaceutical company was accused of promoting the drug’s use for multiple illnesses never approved by the FDA.

The DOJ said that by promoting Seroquel for off-label uses, the company caused false payment claims to be submitted to various federal programs including Medicaid and Medicare. The allegations were originally raised in a lawsuit under the whistleblower provisions of the False Claims Act. As part of the settlement, the federal government will receive $302 million and the states and the District of Columbia will receive $218 million.

While the government should be commended for this important settlement, the amount being paid by Astra Zeneca must be put in perspective. Seroquel originally went to market in 1997 and its sales have since eclipsed over $4 Billion Dollars per year, most of which were for non-approved or off-label uses as a direct result of AZ’s marketing misconduct. So while the amount being paid by AZ may seem like alot, in the overall scheme of things it appears to be the cost of doing business. I suspect that because of the incredible amount of money at issue, that companies like AZ will continue to find ways to market these expensive drugs off-label knowning that they are still making out in terms of the overall profits generated. One of the potential consequences of a government contractor such as AZ being found guilty of off-label violations is debarrment. I suspect that until some of these Pharma giants are debarred, that unfortunately wrongful marketing tactics such as those at issue in the Seroquel case will continue.

Eric L. Young, is a seasoned trial lawyer who specializes in the representation of whistleblowers and plaintiffs in wage and hour class actions. Mr. Young can be contacted at 800-590-4116 or eyoung@young-lawgroup.com