AstraZeneca Seroquel whistleblower suit diminished but preserved by federal judge

AstraZeneca HQ
AstraZeneca, which is struggling as it deals with revenue-draining patent losses, was unable to convince a judge to quash a whistleblower lawsuits tied to one-time top selling antipsychotic drug Seroquel.

The whistle continues to blow in a case alleging AstraZeneca defrauded Medicare by playing down the risks of its antipsychotic drug Seroquel, just not as loudly.

A New York federal judge this week tossed some claims about off-label marketing in a suit brought in a whistleblower action by former AstraZeneca contract sales employee Allison Zayas, but is allowing others related to what the suit calls a “complex fraudulent scheme,” court documents reveal.

The suit revolves around Seroquel IR and Seroquel XR prescriptions reimbursed by Medicare from 1997 to 2009 and whether the U.K. company hid the risks of using them with so-called QT/QTc prolonging medications. The suit says AstraZeneca violated a corporate integrity agreement it was operating under by not disclosing the risks.

AstraZeneca has for years defended itself against thousands of complaints tied to the one-time blockbuster. In 2010, it paid $520 million to settle investigations by the U.S. Attorney's Office in Philadelphia that it had aggressively pushed Seroquel for off-label uses.That case also grew out of whistleblower action about the drug, which at its peak generated more than $3 billion in annual sales for AstraZeneca. .

The legal matter is small compared with the issues the drugmaker faces as generic competition has devastated revenues of two of its once-top sellers Crestor, the statin that went off patent last year, and stomach med Nexium, which went off patent the year before.

But with sales expected to continue to hemorrhage in 2017, the drugmaker last year instituted a $1.1 billion cost-cutting effort which has taken a large toll on its U.S. sales organization. In December, it announced it would whack 700 positions throughout its U.S. commercial organization and North American headquarters in Wilmington, Delaware, where about 120 positions were cut.