AstraZeneca to pay $355 million to settle Zoladex marketing allegations

Saturday, June 21, 2003
By Randall Chase / Associated Press

WILMINGTON, Del. -- AstraZeneca Pharmaceuticals will pay nearly $355 million to settle allegations of illegal pricing and marketing of a prostate cancer drug, federal prosecutors said Friday.

AstraZeneca pleaded guilty in U.S. District Court to conspiring to violate the Prescription Drug Marketing Act, the U.S. attorney's office said. The drug company is a subsidiary of London-based AstraZeneca PLC.

According to prosecutors, AstraZeneca employees gave free samples of the drug Zoladex to urologists, who then submitted claims for payment for the prescription to Medicare, Medicaid and other federally funded insurance programs.

The claims created a loss of nearly $40 million, for which AstraZeneca agreed to pay an almost $64 million criminal fine.

AstraZeneca also agreed to pay the federal government $279.8 million to resolve civil allegations that it inflated the price of Zoladex reported to the government as the basis for reimbursement while deeply discounting the actual price charged to the doctors.

Federal prosecutors also alleged AstraZeneca failed to provide state Medicaid programs with its best price for its drug, as required by law. The company will pay the states more than $11 million.

AstraZeneca said that it accepted responsibility for any improper sampling conduct that took place in the mid-1990s and has taken steps to prevent it from happening again. The settlement did not include an admission of civil liability.

"We are committed to an ongoing, cooperative effort with the government toward ensuring that we market our drugs with the highest ethical standards and respect for the law," the company said.

A company spokeswoman refused to say whether any employees were fired, only that many employees involved in the scheme have since left the company.

Federal investigators did not find any evidence to implicate AstraZeneca's top executives in criminal conduct, said Assistant U.S. attorney Richard Andrews.

Three physicians have been charged with conspiring to violate the federal drug marketing law.

Investigators said some 400 doctors throughout the country received illegal inducements from AstraZeneca to prescribe Zoladex, but there wasn't strong enough evidence in many cases to bring charges.

Zoladex was the company's best-selling cancer drug last year with global sales of $794 million.

The company said in its 2002 annual report and in a filing with the Securities and Exchange Commission that it had set aside $350 million to cover the costs of an expected settlement of the case.


Copyright © 2003 The Detroit News.