AstraZeneca Settles False Claims Act Allegations Involving Unlawful Kickbacks

Delaware-based AstraZeneca recently paid over $7 million to settle claims it engaged in kickback schemes involving its best-selling “purple pill” known as Nexium.
Image source: Wikimedia Commons

Known as the “purple pill,” AstraZeneca’s Nexium is a breakthrough drug targeting the symptoms of acid reflux disease, including painful and damaging esophageal burning and pain. However, according to recent allegations revealed in a Department of Justice press release, the company may have gone to too far to ensure its products reached the hands of doctors and healthcare professionals across the U.S., offering unlawful kickback schemes and illegal incentives for those agreeing to prescribe the product.

In the latest healthcare fraud case involving the False Claims Act, Delaware-based AstraZeneca has agreed to pay the federal government $7.9 million in exchange for the dismissal of the related civil False Claims Act claims against the pharmaceutical giant. Despite having not admitted any liability in the matter, AstraZeneca is alleged to have committed the fraud for several years, until two former employees exposed the schemes under the False Claims Act’s qui tam provisions. In exchange for their willingness to come forward, the whistleblowers will share $1.4 million.

Details of the case against AstraZeneca

The alleged kickback plan implemented by AstraZeneca involved unlawful incentives for pharmacy managers employed by prescription drug benefit company Medco. Allegedly, Medco received discounted prices on other AstraZeneca medications in exchange for Medco’s promise to list Nexium on most of its approved lists of medications available to policyholders. More specifically, the company is alleged to have transferred over $100 million to Medco in the form of price concessions on other drugs in order to ensure the company touted and encouraged the use of Nexium for virtually every Medco policyholder. Naturally, this arrangement limited patients’ perceived options for acid reflux treatment and resulted in the submission of false claims by Medco for reimbursement on behalf of Medicaid and Medicare patients.

What’s more, AstraZeneca offered Medco a 10 percent discount on Nexium drugs, but Medco failed to disclose this fact upon seeking reimbursement. This practice violates the government’s mandate to offer Medicare and Medicaid patients the lowest and best possible price on prescription drugs. Nevertheless, Medco was not joined in the suit involving AstraZeneca but it may be facing similar false claims allegations separately.

During the period in question, AstraZeneca collected sales on its Nexium product topping $21 billion.

Government’s response to the settlement

The U.S. Attorney General’s Office said in a statement, “We will continue to pursue pharmaceutical companies that pay kickbacks to pharmacy benefit managers….Hidden financial agreements between drug manufacturers and pharmacy benefit managers can improperly influence which drugs are available to patients and the price paid for drugs.”

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By | 2018-03-25T12:37:09+00:00 March 10th, 2015|Healthcare Fraud|