AstraZeneca has agreed to pay $110m to settle Texas drugs lawsuit claims of fraudulently marketing Seroquel and Crestor.
The company will pay the amount to clear two whistleblower lawsuits brought by the state of Texas under the Texas Medicaid Fraud Prevention Act (TMFPA).
Under the first settlement, the company has agreed to pay $90m to resolve allegations of targeting the Texas Medicaid system with a fraudulent marketing scheme for its expensive atypical antipsychotic drugs Seroquel IR and Seroquel XR from 2007 through 2010.
As part of second settlement, the company will pay $20m to resolve allegations of misrepresenting and concealed information about the safety, efficacy and appropriate use of its drug Crestor to the Texas Medicaid system.
Seroquel is an antipsychotic drug that secured approval from the US Food and Drug Administration (FDA) for use by adults in 1997.
The FDA restricted Seroquel use to short-term treatment for the more severe end of the spectrum of psychiatric disorders such as schizophrenia and bipolar disorder, due to its severe side-effects.
The Texas Attorney General claimed that the company provided false information to Texas Medicaid providers regarding Seroquel’s efficacy for uses not approved by the FDA.
It 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.
The national law firm Baron & Budd attorney Scott Simmer said: “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.
“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 is said to represent 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.
The FDA limited the use of Crestor due to concerns about its toxicity and it was initially approved in 2003.
Until 2007, Crestor was not approved to treat the progression of atherosclerosis, a disease in which plaque builds up inside the arteries.