DALLAS--(BUSINESS WIRE)--Today, the national law firm of Baron & Budd announced that AstraZeneca has agreed to pay $110 million to settle two whistleblower lawsuits brought by the State of Texas under the Texas Medicaid Fraud Prevention Act (“TMFPA”). The first settlement, totaling $90 million, resolves allegations that AstraZeneca targeted the Texas Medicaid system with a fraudulent marketing scheme for its expensive and powerful atypical antipsychotic drugs Seroquel IR and Seroquel XR from 2007 through 2010. The second settlement for $20 million resolves allegations that AstraZeneca misrepresented and concealed information about the safety, efficacy and appropriate use of its drug Crestor to the Texas Medicaid system. AstraZeneca has denied any wrongdoing in both cases.
Seroquel is an antipsychotic drug approved by the FDA for use by adults in 1997. Due to Seroquel’s severe side-effects, the FDA limited its use to short-term treatment for the more severe end of the spectrum of psychiatric disorders such as schizophrenia and bipolar disorder. The Texas Attorney General alleged that the company gave false information to Texas Medicaid providers regarding Seroquel’s efficacy for uses not approved by the FDA, misrepresented the drug’s potent nature and side effects, illegally promoted its use by children under the age of 18, and improperly influenced and exploited Texas state officials to facilitate the fraud.
“Children who are removed from abusive or neglectful homes and placed in foster care often experience some degree of trauma, which can lead to depression,” said Scott Simmer, the Baron & Budd attorney representing an AstraZeneca sales representative who was the first whistleblower to come forward in the case. “It’s really appalling to think that a drug company could take advantage of vulnerable children to sell a drug that they should not be taking.”
In the second suit, Baron & Budd represented two former AstraZeneca sales specialists who were the first to come forward with information alleging that their employer illegally marketed the drug Crestor to the Texas Medicaid system. Crestor is a member of the class of medications known as “statins,” which lower cholesterol levels by blocking enzymes that are essential to cholesterol production.
Due to concerns about Crestor’s toxicity, the FDA limited the manner in which it could be prescribed when it initially approved the drug in 2003. Crestor was not approved to treat the progression of atherosclerosis, a disease in which plaque builds up inside the arteries, until 2007. However, the suit brought by the state of Texas alleged that AstraZeneca illegally promoted the use of Crestor for treating atherosclerosis, making unsubstantiated claims regarding the efficacy and safety of Crestor.
“When there are multiple drugs on the market that treat similar indications, the state officials who manage the Texas Medicaid formulary of approved drugs have the important task of evaluating which drugs provide the best efficacy, safety and value for money,” said Simmer. “It is simply wrong for a drug maker to misrepresent its products to state officials as well as to doctors, putting lives at risk and wasting taxpayer resources.”
“We are very grateful to state prosecutors Ray Winter, Cynthia O’Keeffe and Eugenia Krieg and their team for their tireless efforts in prosecuting these two cases,” Simmer said. “The Texas Attorney General’s office has been very conscientious in investigating and prosecuting Medicaid fraud allegations brought by our whistleblowers who uncovered this fraud.”
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