AstraZeneca PLC to Shell Out $7.9 Million in Kickback Scandal

AstraZeneca PLC (AZN) to Shell Out $7.9 Million in Kickback Scandal
February 12, 2015
By Riley McDermid, Breaking News Sr. Editor

British drugmaker AstraZeneca PLC has agreed to pay American authorities $7.9 million to settle allegations the company engaged in a kickback scheme with Medco Health Solutions, a pharmacy benefit managers, to boost sales of its heartburn medication Nexium.

"AstraZeneca embarked on this course of unlawful conduct knowing it would lead to the submission of substantial and myriad false claims for Nexium by participating pharmaceutical providers to Government Health Care programs, when by law these claims were not reimbursable," said the initial suit, filed in 2010 in Delaware where the American unit of AstraZeneca is based.

The former AstraZeneca employees, Paul DiMattia and F. Folger Tuggle, who filed the claim will now receive $1,422,000 collectively from the settlement in accordance with laws enacted to encourage whistleblowing, said the Department of Justice.

The U.S. Department of Justice had charged the company with fraud and conspiracy to commit fraud and bribery after an internal whistle-blower alerted regulators to AstraZeneca’s regular agreement to pay for the “sole and exclusive" status of its Nexium on a coveted list of drugs reimbursed under government plans.

Under those schemes, Acting Assistant Attorney General Joyce Branda said AstraZeneca had "hidden financial agreements between drug manufacturers and pharmacy benefit managers can improperly influence which drugs are available to patients and the price paid for the drugs."

The company had also allegedly had a “pay-to-play” deal with Medco to give discounts on other popular medications it makes, including Prilosec, and blood pressure drugs Toprol XL and Plendil.

AstraZeneca said in a statement Wednesday that the settlement was not an admission of guilt, but rather the fastest way for the company to put the lawsuit behind it.

“It is in the best interest 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," said the statement.

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