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Drug-Maker to Pay $355 Million Settlement

June 20, 2003

WILMINGTON, Del. (AP) _ AstraZeneca Pharmaceuticals has pleaded guilty to violating the federal drug marketing law and will pay nearly $355 million to settle allegations of illegal pricing and marketing of a prostate cancer drug, federal prosecutors said Friday.

The company, a major pharmaceutical manufacturer headquartered in Wilmington, pleaded guilty in U.S. District Court to conspiring to violate the Prescription Drug Marketing Act, the U.S. attorney’s office said.

The company gave free samples of the drug Zoladex to urologists, who then submitted claims for payment for the prescription to Medicare, Medicaid and other federally funded insurance programs, according to a statement from the federal prosecutors. The claims created a loss of nearly $40 million for those programs.

As part of a plea agreement, AstraZeneca agreed to pay a $63.9 million fine for violating the act.

AstraZeneca also agreed to pay the federal government $266 million to resolve allegations that the company caused false and fraudulent claims to be filed with the Medicare, TriCare, Department of Defense and Railroad Retirement Board Medicare programs as a result of its fraudulent drug pricing schemes and sales and marketing misconduct, according to the U.S. Attorney’s Office.

The company will pay another $24.9 million to the federal government and the states to settle civil liabilities to the Medicaid program regarding allegations that it caused false and fraudulent claims to be filed with the states as a result of pricing and marketing misconduct.

Federal prosecutors alleged AstraZeneca failed to provide state Medicaid programs with its best price for its drug, as required by law.

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