AstraZeneca to Pay $7.9 Million for False Claims Act Violations

Drug maker AstraZeneca this week agreed to pay $7.9 million to the government to resolve allegations that it engaged in a kickback scheme in violation of the False Claims Act.

The settlement resolves allegations that AstraZeneca agreed to provide remuneration to Medco Health Solutions, a pharmacy benefit manager, in exchange for Medco maintaining Nexium’s “sole and exclusive” status on certain Medco formularies and through other marketing activities related to those Medco formularies. The United States alleged that AstraZeneca provided some or all of the remuneration to Medco through price concessions on several of its drugs other than Nexium, including Prilosec, Toprol XL, and Plendil.

The United States contended that this kickback arrangement between AstraZeneca and Medco violated the federal Anti-Kickback Statute, and thereby caused the submission of false or fraudulent claims for Nexium to the Retiree Drug Subsidy Program. The Anti-Kickback Statute prohibits anyone from offering, paying, soliciting or receiving payment to induce referrals of items or services covered by federal health care programs.

“We will continue to pursue pharmaceutical companies that pay kickbacks to pharmacy benefit managers,” said acting Assistant Attorney General Joyce Branda of the Justice Department’s Civil Division.

The civil settlement resolves a whistleblower complaint filed by former AstraZeneca employees Paul DiMattia and F. Folger Tuggle. DiMattia and Tuggle filed the lawsuit under the FCA’s whistleblower provisions, which permit individuals who discover fraud to file claims on behalf of the government and to share in any recovery. They collectively will receive $1.4 million for the tips they provided.

The settlement with AstraZeneca was the result of a coordinated effort among the Civil Division, the U.S. Attorney’s Office for the District of Delaware, the HHS-OIG, the U.S. Postal Service’s Office of Inspector General and the FBI Wilmington, Delaware, Resident Agency Office and the FBI’s Major Provider Response Team.