AstraZeneca agrees to pay $110 million for Texas Medicaid fraud suits

Super Settlement

Drug making giant AstraZeneca is prepared to settle two lawsuits in Texas accusing the company of "off-label marketing" of rosuvastatin calcium (Crestor—AstraZeneca) and quetiapine fumarate (Seroquel—AstraZeneca) to Medicaid providers in Texas. The settlement has a hefty price tag of $110 million, according to an announcement by the state attorney general.

Texas initially wanted $5 billion, but that amount was reduced to $90 million to settle claims regarding quetiapine and $20 million to settle claims regarding rosuvastatin. Of that total, $31.4 million is earmarked to go to six whistleblowers who gave Texas officials information about AstraZeneca's practices. In 2013 AstraZeneca was accused of having unlawfully marketed quetiapine as early as 2007.

The providers involved in the case treated children at a time when the drug had not yet been approved as safe for patients younger than 18 years old. In addition, AstraZeneca was said to have given “hundreds of thousands of dollars in unlawful payments to two former state hospital physicians to influence the use of the drug as well as provided misleading information about the drug's potency and adverse effects,” according to the state attorney general's office, as reported by the Dallas Morning News.

AstraZeneca also “allegedly sought to expand the use rosuvastatin beyond what was supported by science while downplaying the risk of adverse effects for some individuals,” the attorney general's office said. At the time these allegations were revealed, AstraZeneca was working under a 2010 federal corporate integrity agreement barring it from marketing particular medicines for uses not approved by the FDA, the Dallas Morning News reported.

Texas Attorney General Ken Paxton said the company was prohibited from promoting off-label uses of its antipsychotic medication Seroquel and its cholesterol-lowering drug Crestor, according to Law360. He claimed that “the company continued to do so anyway” by promoting Seroquel to Texas Medicaid providers “who primarily treated children and adolescents when those drugs were not approved as safe and effective for use in that vulnerable population.”According to Paxton, “Texas leads the country in protecting its Medicaid system from pharmaceutical fraud. The allegations that led to this settlement are especially disturbing because the well-being of children and the integrity of the state hospital system were jeopardized. The cooperation and support of the Texas Health and Human Services Commission was essential in achieving this outstanding outcome for Texans.

In a statement, an AstraZeneca spokesperson said that the company makes no concessions or admissions of fault in the settlement agreements. As the spokesperson explained, “While AstraZeneca denies the allegations, it is in the best interests of the company to resolve these matters and to move forward with our business of discovering and developing important, life-changing medicines — while avoiding the delay, uncertainty, and expense of protracted litigation.”

Included in the settlements are attorneys’ fees and costs for both the state and the people who provided information to the attorney general’s office under the whistleblower provisions of the Texas Medicaid Fraud Prevention Act.