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AstraZeneca to Pay $110M for Alleged Medicaid Fraud in Texas

AstraZeneca to Pay $110M for Alleged Medicaid Fraud in Texas

Pharmaceutical companies are notorious for heavily marketing their “blockbuster” drugs. Americans are bombarded with commercials and magazine ads, and pharmaceutical reps spend millions of dollars convincing doctors to prescribe these medicines. Global drug giant AstraZeneca is no different—except that some of its marketing got the company in trouble for Medicaid fraud.

AstraZeneca, which is worth more than $22 billion, has agreed to pay $110 million to settle two whistleblower lawsuits filed in 2013 claiming that the company used deceptive marketing and minimized the side effects of two of its drugs, Crestor and Seroquel, to encourage Texas Medicaid providers to prescribe off-label uses for them. All of this was in direct violation of the Texas Medicaid Fraud Prevention Act.

What makes these allegations even more shocking is that AstraZeneca had already come to a “corporate integrity agreement” with the federal government in 2010, which prohibited the company from promoting off-label uses for either of the drugs. That agreement happened in the wake of another lawsuit with similar allegations. The 2013 lawsuit claims that AstraZeneca essentially ignored the integrity agreement and continued to promote alternative uses for Crestor and Seroquel.

Crestor is a statin that’s used primarily to treat high cholesterol. AstraZeneca has made millions off it since it was introduced to the market in 2003, although that likely changed when a generic version was made available in 2016. The lawsuit claims that AstraZeneca implemented a plan to increase use of the drug by exaggerating what it was capable of doing. According to the claim, the company “tried to expand the use of the statin beyond what the science supports.”

Meanwhile, AstraZeneca allegedly downplayed the fact that Crestor is known to increase the risk of diabetes in some patients. And according to the lawsuit, this scheme explicity targeted Texas doctors and the Medicaid patients they treated.

AstraZeneca seemingly developed a similar scheme for Seroquel, an antipsychotic that’s often used to treat bipolar and schizophrenia. The lawsuit says that since at least 2007, the company aggressively marketed the drug to Medicaid providers who specialized in treating children and adolescents.

The problem? Seroquel wasn’t approved for use in children under 18 at that time. Apparently, that didn’t stop AstraZeneca—the company allegedly paid hundreds of thousands of dollars in illegal payments to two doctors to encourage the use of the drug. The lawsuit also says AstraZeneca downplayed Seroquel’s side effects.

Texas Attorney General Ken Paxton said it best: “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.”

This settlement is the culmination of two whistleblower lawsuits, which were filed by six qui tam plaintiffs: Tracy Miksell-Branch, Layne Foote, Mark Lorden, Rosemarie De Souza, Kenneth McDonough, and Allison Zayas.

Interestingly, this isn’t the first time Allison Zayas has been involved in a lawsuit against AstraZeneca. As a former drug sales rep for the company, Zayas quit the job in 2010 when she started hearing about patients who died while taking doctor-prescribed Seroquel and methadone together.

Altogether, Zayas said she heard about 10 deaths over the course of a few months. She reported this to AstraZeneca, but her employer simply told her to keep selling Seroquel as usual. The company said it would investigate the drug complications, but it wasn’t until June 2011—a year after Zayas initially filed her report—that AstraZeneca was forced to strengthen the Seroquel label by the FDA.

Zayas filed a whistleblower lawsuit against the company in 2010, a few months before she left the job. It was reported that a possible settlement was reached in December 2017, although there is no publicly available information confirming that it was ever approved.

Nevertheless, Zayas can rest easy knowing that AstraZeneca will at least pay $110 million in this most recent settlement. Per the agreement, $31.4 million will be split up between the whistleblowers; $45.8 million will go to Texas to cover the state taxpayer dollars that were stolen from the Medicaid system; $32.8 million will go to the federal government to cover the loss to federal taxpayers.

This is likely not the last time we’ll hear about a major AstraZeneca lawsuit. The company has already paid out more than $1.3 billion to settle Seroquel lawsuits alone; that’s not including lawsuits involving any other drugs. There are several other active lawsuits pending.

If you know that AstraZeneca or another pharmaceutical company is taking advantage of the Medicaid system to sell drugs, you should contact a whistleblower lawyer. Under the False Claims Act, qui tam plaintiffs are entitled to a percentage of any settlement or verdict reached—and you could stand to make millions of dollars for revealing the truth.

We help match would-be whistleblowers with experts and qualified lawyers to ensure they receive the highest awards possible and protection from retaliation.  There is no fee for our services. The Pharmaceutical Integrity Coalition (PIC) is an independent Advocacy Group, with no ties to the Pharma industry. Contact us confidentially by emailing us at: [hidden email] or call us at 202-780-9957.

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