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Vermont To Receive Its Share Of Astrazeneca’s $520 Million Settlement For Claims Of Off-Label Drug Marketing

CONTACT: Linda A. Purdy, Assistant Attorney General, (802) 828-5511

April 29, 2010

Attorney General William H. Sorrell announced today that Vermont has joined with other states and the federal government and reached an agreement in principle with AstraZeneca Pharmaceuticals LP, to settle allegations it engaged in an off-label marketing campaign that improperly promoted the antipsychotic drug, Seroquel. AstraZeneca will pay the states and the federal government a total of $520 million in damages and penalties to compensate Medicaid and various federal healthcare programs for harm suffered as a result of this conduct. Vermont’s federal and state share of the settlement is approximately a half million dollars. Since Vermont’s Medicaid program is paid with both state and federal dollars, the Medicaid program will receive a check for approximately $200,000 after the federal share is deducted. Attorney General William Sorrell hailed the settlement as "a significant victory for Vermont and its consumers." “The improper marketing practices in this case were particularly egregious given the fact that the unapproved uses of these powerful medications were often targeted at our most vulnerable citizens.”

Seroquel is one of a newer generation of antipsychotic medications (called atypical antipsychotics) used to treat certain psychological disorders. From January 1, 2001 through December 31, 2006, AstraZeneca promoted the sale and use of Seroquel for certain uses that the Food and Drug Administration had not approved. The settlement resolves a government investigation into promotional activities undertaken by AstraZeneca that were directed not only to psychiatrists but also to primary care physicians and other health care professionals for unapproved uses in the treatment of medical conditions such as aggression, Alzheimer’s disorder, anger management, anxiety, attention deficit hyperactivity disorder, dementia and sleeplessness.

In implementing its marketing campaign, AstraZeneca was also alleged to have made illegal payments to physicians, paying their way to travel to resort locations to “advise” AstraZeneca about marketing messages for unapproved uses, to serve as authors of articles written by AstraZeneca and its agents, and to conduct studies for unapproved uses of Seroquel. The settlement resolves claims that, as a result of these promotional activities, AstraZeneca caused physicians to prescribe Seroquel for children, adolescents and dementia patients in long term care facilities, which are uses that were not medically accepted indications for which state Medicaid programs would approve reimbursement.

As part of the settlement, AstraZeneca will enter into a Corporate Integrity Agreement with the United States Department of Health and Human Services, Office of the Inspector General, which will closely monitor the company’s future marketing and sales practices.

This settlement is based on qui tam cases that were filed in the United States District Court for the Eastern District of Pennsylvania by relators – private parties who filed actions under state and federal false claims statutes.

A National Association of Medicaid Fraud Control Units team participated in the investigation and conducted the settlement negotiations with AstraZeneca on behalf of the settling states. Team members included representatives from New York, Massachusetts, Illinois, Ohio, New Jersey, Texas and California.

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