AstraZeneca Agrees to Settle Whistleblower Lawsuit for $7.9 Million

Pharmaceutical manufacturer AstraZeneca LP has agreed to pay $7.9 million to resolve allegations that the company paid kickbacks in the form of price concessions to a pharmacy benefit manager. AstraZeneca, a Delaware company, markets and sells pharmaceuticals in the United States. Today’s settlement announcement resolves whistleblower claims filed by two former employees. Each will earn rewards for their role in exposing the alleged fraud.

AstraZeneca LogoAccording to the whistleblower lawsuit, AstraZeneca provided kickbacks to Medco Health Solutions, a pharmacy benefit manager with headquarters in Franklin Lakes, New Jersey. The kickbacks were designed to give AstraZeneca drugs like Nexium (a popular acid reflux medication) “sole and exclusive” status in Medco formularies.

The Justice Department claims that AstraZeneca offered remuneration to Medco in the form of price concessions on other company drugs like Plendil, Toprol XL, and Prilosec. These price breaks constituted a violation of the Federal Anti-Kickback statute, which led to the submission of false claims concerning drugs like Nexium to the Retiree Drug Subsidy Program.

AstraZeneca issued a statement following the settlement announcement, denying any wrongdoing. A spokesman for Express Scripts Co., the company that now owns Medco, did not wish to comment on the case.

The settlement resolves claims initially filed in 2010 by Paul DiMattia and F. Folger Tuggle, two former AstraZeneca executives. The government decided to intervene in their case. As a reward for bringing the alleged fraud to the government’s attention, DiMattia and Tuggle will collectively receive $1.42 million.

The two whistleblowers claim that AstraZeneca engaged in the Nexium fraud scheme before the ink had dried on a $520 million settlement in 2010 concerning allegations of illegally marketing another drug called Seroquel. AstraZeneca allegedly marketed the anti-psychotic drug for off-label uses (uses not approved by the Food and Drug Administration).

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