April 27th, 2010
01:43 PM ET

Drug maker to pay $520 million fine for illegal marketing

Pharmaceutical firm AstraZeneca has agreed to pay a $520 million fine to settle claims that it illegally marketed its antipsychotic drug Seroquel, the Department of Justice said Tuesday.

AstraZeneca is charged with fraudulently marketing Seroquel and promoting the drug to patients and physicians for uses that the Food and Drug Administration never approved, Attorney General Eric Holder said at Tuesday's settlement announcement.

The pharmaceutical giant has also been accused of violating anti-kickback laws by paying doctors to refer the drug to patients, while at the same time bringing in money from government health care programs.

"According to the settlement, AstraZeneca's illegal marketing of the drug led to millions of dollars in false claims against federal and state programs like Medicare and Medicaid," Holder said.

The settlement fine of $520 million, which will be paid to federal and state taxpayers, is the most money ever paid by a business in a civil-only settlement for charges of off-label marketing, the Department of Justice said.

"These were not victimless crimes," said Holder. "Illegal acts by pharmaceutical companies and false claims against Medicare and Medicaid can put the public health at risk, corrupt medical decisions by health care providers, and take billions of dollars directly out of taxpayers' pockets."

Read full CNNMoney.com story

soundoff (315 Responses)
  1. ghost

    hey aleast people are now seeing what these big companies are doing behind the sences drugs arnt the answer like you said bobotron stop dumbing down society

    April 27, 2010 at 4:19 pm | Report abuse |
  2. ketan shah

    The Largest five Drug companies should be punished for $500 billions dollars fine for
    killing innocent sick people by marketing and giving all toxic drugs.

    April 27, 2010 at 4:19 pm | Report abuse |
  3. Reese

    Ummm...where's the story?

    April 27, 2010 at 4:19 pm | Report abuse |
  4. KH

    Did Blogger DJ write the words "company caring"...that is funny. I'll bet he's a comic. Drug companies couldn't give a &*%$ about people.....it's money they care about. Get a clue. I see their marketing works great on many people. If they cared, they'd provide needed drugs that work, to people for a reasonable profit and 500% isn't reasonable.... Oh wait.....don't worry, Obama will take them over shortly and start giving drugs away.....stay tuned..... and what few tax payers are left working, he'll just tax them more to pay for it all....

    April 27, 2010 at 4:19 pm | Report abuse |
  5. JAMES S COTT WILLIAMS

    hI, i AM PISSED ABOUT THE SERQUEL XR AND IT HELPS ME SLEEP, IT DOES NOT DO NOT DO ANYTHING ELSE THAT i KNOW OF. i AM SO UPSET THAT THE DOCTOR DID NOT KNOW ANYTHING FOR NOW ABOUT 5 YRS NOW THAT i HAVE BEEN TAKING. i DO NOT KNOW WHAT TO DO. THIS IS A MULTI MILLION /BILLION DOLLAR COMPANY THAT NEEDS TO GO DOWN. PERIOD. NO IF AND OR BUTS ABOUT IT. iIF i START BECOMING OUT OF COMTROL BECAUSE OF THIS MEDICATION,,,, i WILL TAKE THEM TO COURT. IM NOT A PARINOID, I JUST NEED SLEEP BECAUSE OF DEPRESSION AND IF ANYTHING IS AWKWARD BECAUSE OF THIS THEN THE SHIT IS GOING TO HIT THE WALL. ME AND MY WIFE ARE BOTH TAKING THIS MEDICATION AND HER DOCTOR BELIEVES IN IT ALSO. BOGUS , STUPID, PAHARMACIST, YOU KNOW THAT THEREIS A VERY SMAL CUSP AT THE TOP OF OUR PERSONALITY THAT DETERMINES THE POINT AT WHICH THE PERSON WILL FALL OVER THE BAD END WHICH FALLS INTO PSYCHOTIC PHASE OR STAYS ON THE OTHER SIDE AND STAYS NORMAL , THIS IS A VERY SMALL CUSP AND ANYONE CAN FALL INTO THIS CATIGORIE.
    THIS NEEDS , BY ME TO READ MORE AND CONTACT OUR DOCTOR ABOUT THIS , PUT IT THIS WAY.WE BELIEVED THE MEDS WOULD HELP . nOW WHAT DO WE DO.
    SIGNED
    jANMES SCOTT WILLIMAS

    April 27, 2010 at 4:20 pm | Report abuse |
  6. Jay

    What pharmaceutical companies need to do is stop spending endless millions on advertising and help research cancer, AIDS, autism etc etc. The public does not need to have drug ads everywhere, if someone wants to seek out info look it up on the net, i dont need to see it on the net, in magazines and on radio/tv ads. If anything it turns people into hypochondriacs and more and more people get meds they probably didn't need in the first place

    April 27, 2010 at 4:20 pm | Report abuse |
  7. Ethernet

    OMG, what else is Obama gonna do to drive up health care costs?? Thanks for nothing!

    April 27, 2010 at 4:20 pm | Report abuse |
  8. LBSquirrel

    To Nicole (Comment #156):

    I get your point – "...take some responsibility for yourselves..." – but at some point every manufacturer has a legal/ civil burden attached to introducing ('safe') products into our markets.

    For instance;
    Baby toys that contain extremely small (but dangerous) amounts of lead. Since all adults know lead is found in paints and paint is found on 80% of all kids toys, r u suggesting the parents who shop Toys-R-Us lose the right to sue the manufacturer if they don't first write Hasbro to request test results confirming the lead-content is safe before handing lil Johnny his GI Joe for X-Mas? Are they irresponsible too?

    Big Pharm has far more reliable testing techniques than it's consumers.

    April 27, 2010 at 4:21 pm | Report abuse |
  9. KH

    Socialist Government will fix everything

    April 27, 2010 at 4:21 pm | Report abuse |
  10. Phil

    Full story from NY Times
    http://www.nytimes.com/2010/04/27/business/27drug.html?scp=2&sq=astrazeneca&st=cse

    April 27, 2010 at 4:21 pm | Report abuse |
  11. George

    A former AstraZeneca PLC (AZN, AZN.LN) sales representative who helped the government to investigate allegations of illegal marketing practices at the drug maker is no stranger to blowing the whistle.

    James Wetta's 2004 whistleblower lawsuit against AstraZeneca triggered a U.S. probe of whether the U.K.-based company marketed the antipsychotic Seroquel for unapproved uses, the Justice Department said Tuesday. AstraZeneca and Justice officials confirmed Tuesday that the company has formally agreed to pay $520 million to settle the probe, though Astra denies the allegations.

    Before he worked for AstraZeneca, Wetta was a sales rep for Eli Lilly & Co. (LLY), and he assisted a separate government probe of Lilly's marketing practices that was settled last year when Lilly paid more than $1.4 billion and pleaded guilty to a criminal charge, according to court documents.

    Wetta's role in both settlements stand to make him a millionaire many times over. He got a cut of the Lilly settlement and stands to get a share of the AstraZeneca pact, in accordance with laws designed to encourage people to come forward with information about companies they believe are defrauding the government.

    He stands to receive $45 million of the federal share of the AstraZeneca settlement; he will share an undisclosed portion of that with another whistleblower in the case. And his role in last year's Lilly settlement entitled him to receive an undisclosed portion of about $100 million reserved for several whistleblowers in that case. His exact share of both settlements couldn't immediately be determined.

    Wetta couldn't be reached for comment. His attorney, Mark Lipowicz, said his client declined to be interviewed. He said Wetta had knowledge of much of the allegations made by the Justice Department in announcing the AstraZeneca settlement Tuesday, and that he cooperated over a period of years with the government.

    The Justice Department alleged that, between 2001 and 2006, AstraZeneca promoted Seroquel for certain uses not approved by the FDA as safe and effective, including for dementia in the elderly. The government alleged the company paid doctors to speak at events to other doctors about unapproved uses of Seroquel, among other allegations.

    AstraZeneca spokesman Tony Jewell confirmed Wetta was a sales rep for the company, but declined to say when. Jewell said the company denies the allegations.

    According to Wetta's earlier lawsuit, he was a sales rep for Indianapolis-based Lilly in 2001 when a manager told Wetta that his sales performance wasn't meeting company expectations.

    Wetta objected to certain sales tactics that he was informed would help him keep his job, including arranging for certain drugs to be switched on patients without their knowledge, according to the lawsuit. Wetta resigned from Lilly in 2002, according to the lawsuit.

    Lilly's settlement last year resolved the various whistleblower lawsuits, but the company admitted only to illegal conduct surrounding its marketing of the antipsychotic Zyprexa.

    A Lilly spokeswoman couldn't immediately be reached to comment on Wetta's allegations and role in the government probe.

    -By Peter Loftus, Dow Jones Newswires; 215-656-8289; peter.loftus@dowjones.com

    (Brent Kendall in Washington contributed to this article.)

    April 27, 2010 at 4:23 pm | Report abuse |
  12. Laura

    "The Justice Department alleged that, between 2001 and 2006, AstraZeneca promoted Seroquel for certain uses not approved by the FDA as safe and effective, including for dementia in the elderly. The government alleged the company paid doctors to speak at events to other doctors about unapproved uses of Seroquel, among other allegations.

    The full article is here:
    http://online.wsj.com/article/BT-CO-20100427-717600.html?mod=WSJ_World_MIDDLEHeadlinesEurope

    April 27, 2010 at 4:26 pm | Report abuse |
  13. Fedup2

    This fine is a small fraction of the profits made by this firm on this item. Just a cost of doing business and will have no effect on future marketing ploys by this company. Business as usual.

    April 27, 2010 at 4:27 pm | Report abuse |
  14. Gordon

    Be serious. They really don't care about the fines because they make so much money selling the drugs for non-approved purposes, it way overrides the fines. The drug firms have been doing this for year, sometime with fines in the billions. They won't stop until a CEO spens a year in prison. The, they will stop.

    April 27, 2010 at 4:27 pm | Report abuse |
  15. okie

    Who gets the half billion bucks?? BIG GOVERNMENT, of course!!! The people who were duped will not get a stinking dime!!! This is taxation by huge fines!!!

    April 27, 2010 at 4:28 pm | Report abuse |
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