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AstraZeneca Agrees to $110 Million Texas Medicaid Settlement

On August 7, 2018, Texas Attorney General Ken Paxton ("Paxton") announced that the pharmaceutical company AstraZeneca LP ("AstraZeneca") has agreed to a $110 million settlement to satisfy claims it violated the Texas Medicaid Fraud Prevention Act by falsely marketing its Crestor and Seroquel drugs.

AstraZeneca was already under the increased regulations of a corporate integrity agreement ("CIA") it entered in 2010 because of previous Medicaid fraud allegations when the false marketing schemes were discovered. The CIA expressly forbade any off-label promotion of cholesterol-lowering drug, Crestor, or antipsychotic, Seroquel. The State of Texas, however, accused AstraZeneca of continuing to market 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."

Texas leveraged similar allegations regarding Crestor, accusing AstraZeneca of carrying out "a plan of deception targeted directly at Texas Medicaid." Because Crestor is a statin, a drug which decreases levels of fat in blood, Texas claimed AstraZeneca acted irresponsibly in its effort to "expand the use of the statin beyond what the science supported, while downplaying a significant risk of diabetes in certain patients."

According to Paxton's statement, "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 settlement was signed on July 27, 2018, and details the pharmaceutical company's agreement to pay $20 million to settle the Crestor claims and $90 million to settle the claims relating to Seroquel. The settlement includes attorneys' fees and costs for the whistleblower relators, former AstraZeneca employees. Counsel for relators asserted that "it is simply wrong for a drug maker to misrepresent its products to state officials as well as to doctors, putting lives at risk and wasting taxpayer resources." Counsel for the Crestor whistleblower declared the settlements represented a "long overdue resolution thanks to the efforts of Texas AG."

While AstraZeneca continues to deny the allegations and admits no fault, a spokesperson commented that "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."

The legal team at Shepherd, Finkelman, Miller & Shah, LLP ("SFMS") has significant experience litigating whistleblower and qui tam matters. If you have any questions regarding this subject or this posting, please contact Nick Lussier ([email protected]) or Chiharu Sekino ([email protected]). We can also be reached toll-free at (866) 540-5505.

SFMS is a nationwide law firm with offices in California, Connecticut, Florida, New Jersey, New York, and Pennsylvania. SFMS is an active member of Integrated Advisory Group (www.iaginternational.org), which provides us with the ability to provide our clients with access to excellent legal and accounting resources throughout the globe. For more information about our firm, please visit us at www.sfmslaw.com.

Sources

Vogt, RJ. "AstraZeneca Settles Texas Medicaid Fraud Suits for $110M." Law 360. Last Modified on August 7, 2018.

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