February 12, 2015

DOJ Catch of the Week — AstraZeneca

the C|C Whistleblower Lawyer Team

This week’s Department of Justice “catch of the week” goes to Delaware-based AstraZeneca LP.  Yesterday, the pharmaceutical giant agreed to pay $7.9 million to settle charges it violated the False Claims Act by engaging in an illegal kickback scheme with pharmacy benefit manager Medco Health Solutions.  Acting Assistant Attorney General Joyce R. Branda emphasized the DOJ’s commitment to going after these kinds of schemes because they “can improperly influence which drugs are available to patients and the price paid for drugs.”  See DOJ Press Release

According to the government, AstraZeneca agreed to provide remuneration to Medco in exchange for Medco maintaining for AstraZeneca’s Nexium drug “sole and exclusive” status on certain Medco formularies and through other marketing activities related to those Medco formularies.  The government claimed AstraZeneca provided some or all of the remuneration to Medco through price concessions on drugs other than Nexium such as Prilosec, Toprol XL and Plendil.  The government challenged the kickback arrangement between AstraZeneca and Medco as a violation of the Federal Anti-Kickback statute which caused the submission of false or fraudulent claims for Nexium to the Retiree Drug Subsidy Program.

Special Agent in Charge Nick DiGiulio trumpeted the settlement as another example of the government’s “crackdown on kickback arrangements which can undermine drug choices for patients and corrode the public’s trust in the health care system.”  The charges originated with a whistleblower lawsuit filed by former AstraZeneca employees Paul DiMattia and F. Folger Tuggle under the qui tam provisions of the False Claims Act.  They will collectively receive a whistleblower award of $1,422,000.

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