AstraZeneca's level of cooperation with the Department of Justice's investigation into allegations of off-label promotion for its antipsychotic Seroquel (quetiapine) may have helped shape the final $520 million civil settlement.

The Justice Department announced the settlement at an April 27 press conference in Washington, D.C., with a bevy of top government officials, including Attorney General Eric Holder, Assistant Attorney General for the Civil Division Tony West, U.S. Attorney for the Eastern District of Pennsylvania Michael Levy, HHS Secretary Kathleen Sebelius and FDA Commissioner Margaret Hamburg.

Holder said the settlement is the largest amount ever paid by a company in a civil-only settlement of off-label marketing claims. Other companies have paid more in settlements involving both civil and criminal claims.

AstraZeneca Avoids Criminal Charges

The Justice Department noted in a press release that in March 2006, AstraZeneca brought certain conduct to the attention of the government and then cooperated in the investigation of the allegations. That could be why the company did not face criminal fines, as Lilly did in its settlement regarding promotion of Zyprexa (olanzapine) and Pfizer did in its multi-drug settlement.

Although the settlement agreement states that claims of any criminal liability are "specifically reserved and excluded from the scope and terms" of the agreement, it is unlikely the government will pursue criminal charges in the future.

Jonathan Diesenhaus, a former Justice Department senior trial counsel, said these "carve outs" are standard and non-negotiable and do not signal the possibility of a future criminal action. He added that "it would be highly unusual for the government to take that many millions, and for the company to pay that many millions, without an understanding or assurance that the investigation of the company was over."

As for why there were no criminal claims, Diesenhaus, a partner at Hogan & Hartson, said "it could very well be that their degree of cooperation was so high and the conduct not terribly egregious that the government elected not to pursue criminal charges as well."

The settlement is similar to other agreements that DoJ has struck with pharma companies to resolve off-label investigations. And as with other settlements, it includes a five-year corporate integrity agreement with HHS's Office of Inspector General.

The terms of the CIA are in line with those recently inked with other firms. For example, it requires the board of directors to conduct quarterly reviews of the company's compliance program and AstraZeneca management to certify compliance with the CIA, as well as compliance with the requirements of FDA and federal heath care programs.

In addition, AstraZeneca speakers must complete training and speakers and consultants must enter written agreements that describe the scope of their work and the fees they are to be paid. The company must also establish a comprehensive field force monitoring program to evaluate sales representatives' interactions with health care providers and post payments to physicians on its Web site on or before Aug. 31.

Government Pursuing Companies By Drug Class

AstraZeneca announced in October that it had reached an agreement in principle with the U.S. Attorney's Office in Philadelphia (¹ Also see "Seroquel Off-Label Settlement Puts Clinical Researchers In Spotlight" - Pink Sheet, 29 October, 2009.). It is the latest in a string of companies to reach mega-settlements with the government. Pfizer remains at the top of the charts with its $2.3 billion settlement with DoJ to resolve allegations of off-label marketing and kickbacks to health care providers involving numerous drugs, including its antipsychotic Geodon (ziprasidone).

AstraZeneca is the fourth manufacturer of an antipsychotic to reach a deal. In addition to Pfizer, Lilly paid $1.4 billion in criminal and civil fines last year for off-label marketing of Zyprexa and in 2007 Bristol-Myers Squibb reached a $500 million settlement involving several drugs, including its antipsychotic Abilify (aripiprazole).

The Justice Department also has a pending complaint against Johnson & Johnson alleging it paid kickbacks to Omnicare, the nation's largest nursing home pharmacy to get it to purchase and recommend J&J drugs, including its antipsychotic Risperdal (risperidone) (² Also see "DoJ Claims J&J Paid Kickbacks To Pharmacy To Boost Risperdal Use In Nursing Homes" - Pink Sheet, 15 January, 2010.).

The latest settlement agreement "stands for the proposition that everyone in a class is at risk when the government targets a class," said Meredith Manning, a partner at Hogan & Hartson. "When companies are internally deciding what to do, the fact that other companies are doing something doesn't necessarily give them comfort."

AstraZeneca denied the allegations, saying it entered the agreement to move forward with its operations. "It is in the best interest of AstraZeneca 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," AstraZeneca U.S. General Counsel Glenn Engelmann said in a statement.

DoJ Claims AstraZeneca Targeted Certain Specialists

The settlement alleges that between January 2001 and December 2006, AstraZeneca promoted Seroquel to psychiatrists and other physicians for uses not approved by FDA, including aggression, Alzheimer's disease, anger management, anxiety, attention deficit hyperactivity disorder, bipolar maintenance, dementia, depression, mood disorder, post-traumatic stress disorder and sleeplessness.

The agreement claims the company targeted its illegal marketing toward doctors who do not typically treat schizophrenia or bipolar disorder, such as physicians who treat the elderly, primary care physicians, those who treat children and adolescents, and to long-term care facilities and prisons.

In addition, the government contends that AstraZeneca offered and paid illegal remuneration to doctors it recruited to conduct studies of unapproved uses and to serve as authors of articles written by AstraZeneca. In addition, the settlement alleges the company paid doctors "to travel to resort locations to 'advise' AstraZeneca about marketing messages for unapproved uses of Seroquel."

Of the $520 million settlement, $301 million is to go to the federal government, $218 million to state Medicaid programs and the District of Columbia and more than $45 million to whistleblower James Wetta, a former sales rep, who must share a portion of the award with psychiatrist Stefan Kruszewski, who filed a later qui tam action against AstraZeneca.

The government launched its investigation in response to a False Claims Act suit Wetta brought against AstraZeneca. Wetta was also one of the whistleblowers in the government's investigation of Lilly while Kruszewski was a whistleblower in the Pfizer case with respect to Geodon .

On another front, AstraZeneca is continuing to deal with more than 10,000 product liability suits in which plaintiffs claim they developed diabetes or some other injury from taking Seroquel. The company has prevailed thus far. Last year the first two cases pending in federal multi-district litigation were dismissed and seven cases have been dismissed in state courts. In the only case to go to trial, a New Jersey state court jury issued a verdict for AstraZeneca last month.

- Brenda Sandburg ( ³ b.sandburg@elsevier.com )

AstraZeneca's Seroquel Settlement With DoJ Is Fourth Targeting Antipsychotic Off-Label Promotion; Firm Avoids Criminal Charges

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