Texas Attorney General Ken Paxton today announced that pharmaceutical giant AstraZeneca agreed to pay $110 million to the state of Texas to settle lawsuits alleging that the company falsely and misleadingly marketed two of its drugs in violation of the Texas Medicaid Fraud Prevention Act.
AstraZeneca was accused of engaging in false and misleading marketing schemes at a time when the company was under the strict obligations of a 2010 federal “corporate integrity agreement” resulting from prior allegations of Medicaid fraud. The federal agreement prohibited Astra Zeneca from promoting its antipsychotic medication Seroquel and cholesterol-lowering statin drug Crestor for uses not approved by the FDA, but Texas alleged the company continued to do so anyway. Such illegal pharmaceutical promotion is commonly referred to as “off-label marketing.”
AstraZeneca allegedly promoted its powerful and potentially dangerous antipsychotic drug to Texas Medicaid providers, who primarily treated children and adolescents when those drugs were not approved as safe and effective for use in that vulnerable population. Attorney General Paxton’s office accused AstraZeneca of making hundreds of thousands of dollars in illegal payments to two former state hospital doctors to unduly influence the use of Seroquel in the state hospital system.
The company was also accused of a similar nationwide marketing fraud scheme involving Crestor, including allegations that AstraZeneca executed a plan of deception targeted directly at Texas Medicaid to expand the use of the statin beyond what the science supported, while downplaying a significant risk of diabetes in certain patients.
“Texas leads the country in protecting its Medicaid system from pharmaceutical fraud,” Attorney General Paxton said. “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. The cooperation and support of the Texas Health and Human Services Commission was essential in achieving this outstanding outcome for Texans.”
The settlements are the culmination of litigation by Attorney General Paxton’s Civil Medicaid Fraud Division. Former Astra Zeneca employees provided the initial information to the attorney general’s office under the whistleblower provisions of the Texas Medicaid Fraud Prevention Act. Since 2000, the attorney general’s office has recovered more than $1.8 billion for taxpayers under the Act.