AstraZeneca Agrees to Pay $7.9 Million to Resolve False Claims Act Allegations
Delaware-based pharmaceutical giant AstraZeneca has agreed to settle False Claims Act allegations with the federal government to the tune of $7.9 million.
On Wednesday, February 11th, AstraZeneca agreed to the False Claims Act allegation settlement with the Department of Justice to resolve all claims that the company violated the False Claims Act.
“We will continue to pursue pharmaceutical companies that pay kickbacks to pharmacy benefit managers,” said Acting Assistant Attorney General Joyce R. Branda of the Justice Department’s Civil Division. “Hidden financial agreements between drug manufacturers and pharmacy benefit managers can improperly influence which drugs are available to patients and the price paid for drugs.”
“AstraZeneca embarked on this course of unlawful conduct knowing it would lead to the submission of substantial and myriad false claims for Nexium by participating pharmaceutical providers to Government Health Care programs, when by law these claims were not reimbursable,” a federal whistle-blower court complaint filed in Delaware alleged.
The kickbacks claims involve a deal that AstraZeneca brokered with Medco Health Solutions, a pharmacy benefit manager, in exchange for making AstraZeneca’s acid reflux drug Nexium the top priority in their benefits list. The kickbacks scheme violated the False Claims Act by eliminating competition and leading to the submission of false or fraudulent claims on the part of Medco for Nexium to the Medicare program.
“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 (HHS-OIG). “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.”
“AstraZeneca denies the allegations,” spokeswoman Michele Meixell said in an emailed statement. “It is in the best interest 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.”
The company also reportedly violated a corporate integrity agreement signed in 2003, when AstraZeneca pleaded guilty to the illegal marketing of breast and endometrial cancer drug Zoladex.
Kickbacks and Violating the False Claims Act
Kickbacks refer to a form of negotiated bribery in which one returns part of the purchase price of an item to a buyer or buyer’s representative with the intent of inducing a purchase or improperly influencing purchases in the future. They are most commonly seen with health care services, where providers may use self-referrals within large organizations. This is known as a Stark violation and can result in penalties.
Not all kickbacks are considered illegal. If a kickback does not specifically violate the federal or state law, the kickback may be considered normal, legal and tax deductible. Tax deductibility is prohibited by an official, employee of the federal government or an official or employee of a foreign government.
The Strom Law Firm Protects Whistleblowers Who File False Claims Act Lawsuits
If you have first-hand knowledge of government fraud occurring at your place of employment or your doctor’s office, including Medicaid fraud, the attorneys at the Strom Law Firm can help protect your rights. In order to help the government provide the best possible services, Medicare and Medicaid fraud must be reported as soon as possible. The attorneys at the Strom Law Firm understand the complexity of qui tam and whistleblower suits, and we offer free, confidential consultations to discuss the facts of your case. Contact us today.803.252.4800