Delaware-based AstraZeneca pays out big settlement

Pharmaceutical giant AstraZeneca has agreed to pay the U.S. Department of Justice $7.9 million to make kickback allegations go away.

In a statement released Wednesday, the Justice Department announced the agreement resolves allegations that the Delaware-based drug maker engaged in a kickback scheme in violation of the False Claims Act. The allegations involved AstraZeneca’s heartburn medicines sold under the trade names Nexium and Prilosec.

Former employees Paul DiMattia and F. Folger Tuggle filed a lawsuit in the U.S. District Court for the District of Delaware under the whistleblower provision of the False Claims Act. They alleged that AstraZeneca paid prescription drug manager Medco Health Solutions to only offer Nexium on certain lists of approved medications. The suit alleged concessions were also made on Prilosec and other drugs.

Government officials said the arrangement not only improperly influenced which drugs were available to patients and the price paid for drugs, it also resulted in false or fraudulent claims.

“Pharmaceutical companies that pay kickbacks in order to boost profits will be held accountable for their improper conduct,” said Special Agent in Charge Nick DiGiulio of the U.S. Department of Health and Human Services Office of Inspector General. “We will continue to crack down on kickback arrangements, which can undermine drug choices for patients and corrode the public’s trust in the health care system.”

As part of the settlement, DiMattia and Tuggle will collectively receive $1,422,000.

“By this agreement we are making important strides in holding drug manufacturers accountable not only in Delaware but nationwide,” said U.S. Attorney Charles M. Oberly III, District of Delaware.

The civil settlement is not an admission of guilt however; there has been no determination of liability, according to the Justice Department’s release. 

AstraZeneca denies the allegations. The company released a statement that read, “It is in the best interests of the company to resolve these matters and to move forward with our business of discovering and developing important, life-changing medicines – while avoiding the delay, uncertainty, and expense of protracted litigation.”