A federal judge in the Eastern District of Pennsylvania has dismissed a whistleblower suit against AstraZeneca Pharmaceuticals that alleged the drug manufacturer entered into fraudulent agreements to sell its brand-name drugs. Pharmacist Karl Schumann, who was vice president of pharmaceutical contracting for Medco from December 1999 to January 2003, had alleged that AstraZeneca entered into sham contracts with Medco to induce it to purchase and dispense to government plan patients its brand-name drugs, rather than their generic equivalents, in violation of anti-kickback laws, causing false reports and false claims for reimbursement of those drugs to be submitted to government plans. Medco is one of the country’s largest pharmacy-benefit managers and mail-order pharmacies, and essentially acts as a middleman between governmental entities that pay for prescription drugs. In the complaint, the plaintiff contended that AstraZeneca paid disguised, undisclosed rebates, fees and grants to Medco, which was a purchaser of AstraZeneca’s Prilosec and Nexium brand-name drugs. Under federal law, drug makers who participate in government programs, such as Medicaid or 340B, must pay rebates to the government so the government doesn’t pay more for drug purchases than the best price for which the manufacturer sells the drug to other purchasers, court papers state.
