Texas spanks AstraZeneca as a repeat offender in settling Seroquel, Crestor whistleblower suits

Legal and regulatory issues
AstraZeneca's Tuesday legal settlement is the latest in a series of deals wrapping up Seroquel whistleblower and liability claims. (iStock/seb_ra)

Add another $100 million or so to AstraZeneca’s billion-dollar tally of Seroquel legal settlements. The pharma giant has agreed to settle a Texas Medicaid fraud lawsuit that claimed it hawked the powerful antipsychotic for unapproved uses, including for children, and paid off state officials to help it win preferred status on the Texas formulary.

The $110 million deal comprises $90 million to resolve (PDF) the Seroquel claims and another $20 million to wrap up (PDF) a separate lawsuit claiming AstraZeneca touted its statin drug Crestor as superior to its rivals. The company didn’t admit wrongdoing as part of the deal.

The state claimed AstraZeneca aggressively promoted Seroquel to child and adolescent psychiatrists, even though the drug wasn’t approved to treat children, and misled doctors and Medicaid officials about its side effects. The company allegedly paid two state hospital doctors $465,000, ostensibly for speaking engagements, but according to the lawsuit, internal documents showed AZ wanted the two officials to push Seroquel to a state formulary committee and to other Texas healthcare providers.

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AstraZeneca said in an emailed statement that it agreed to settle “to resolve these matters and move forward” and that it doesn’t admit it did anything wrong. “AstraZeneca makes no concessions or admissions of fault in the settlement agreements,’’ the company said.

RELATED: Texas AG: AstraZeneca paid $465K in kickbacks, committed fraud in Seroquel marketing

The state's own statement about the deal leaned hard on the fact that AstraZeneca had signed a "corporate integrity agreement" with the Justice Department in 2010, promising to eschew off-label Seroquel marketing. Even after making that pledge, the state said, the company kept promoting the drug to pediatric psychiatrists, the state said. A marketing team ran the numbers on dropping those doctors from their call list and decided that it was "a substantial amount of business to have no promotional efforts,” the AG noted in a 2014 court filing, citing an internal email.

“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," Texas AG Ken Paxton said in the statement.

Seroquel once was one of AstraZeneca’s biggest blockbusters. In 2011, the last full year before it went off patent in the U.S., it brought in $5.8 billion globally, up from $5.3 billion the previous year. Sales plummeted to just over $500 million last year. According to Bloomberg, Texas had initially sought to recover $5 billion via the two lawsuits.

As part of an ongoing series of asset sales, AstraZeneca sold off rights to the Seroquel franchise for $538 million to Luye Pharma in May.

RELATED: Hospital, psychiatrists in Texas feel blowback from kickback schemes

AstraZeneca has shelled out some heftier payments to resolve other Seroquel allegations. In 2010, it agreed to pay $520 million to wrap up federal off-label marketing claims, and it paid $350 million to settle more than 20,000 lawsuits over Seroquel’s potential to trigger diabetes.

More payments could be yet to come: The lead Seroquel whistleblower, Allison Zayas, also filed a federal False Claims Act lawsuit—joined by a number of states—that’s now pending in New York.