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Fraudulent claims land multinational drug company in hot water

The antipsychotic medication Seroquel was once the equivalent of a goldmine for global pharmaceutical company AstraZeneca. Reportedly, sales of the drug reached an otherworldly level of $5.3 billion in 2010.

And then earth came calling. When the company’s patent protection rights expired, Seroquel-linked profits fell sharply. In fact, they fell to about $500 million last year. AstraZeneca ended up selling its drug rights to another company this past spring.

That sale did not eliminate attendant liabilities tied to the drug for the company, however. Indeed, AstraZeneca has been embroiled in some nasty litigation for several years, with outcomes now surfacing that are likely stressing company executives to the hilt.

Like this one, for instance. AstraZeneca just recently agreed to a settlement with Texas health regulators that calls for it to pay $110 million linked with its alleged fraudulent claims concerning the effectiveness of Seroquel and another company drug offering.

Authorities say that AstraZeneca officials and sales reps aggressively pushed Seroquel for use in an inappropriate and unapproved consumer demographic, namely children and adolescents. And the company reportedly did so after promising not to target that group with so-called “off-label” marketing efforts.

The Texas litigation is now a done deal, but more fraud-linked challenges loom large for AstraZeneca. Federal whistleblower lawsuits are in various stages in multiple states alleging marketing misrepresentations, kickbacks to physicians to push Seroquel use and the downplaying of product risks.

The ongoing litigation features both the federal government and numerous states as plaintiffs.

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