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AstraZeneca Pleads Guilty in Zoladex Case

By ALM Staff | Law Journal Newsletters |
September 01, 2003

Major pharmaceutical manufacturer AstraZeneca Pharmaceuticals LP pleaded guilty to a large-scale health care crime and agreed to pay $355 million to resolve the associated criminal charges and civil liabilities, according to an announcement released by the FDA Office of Criminal Investigations (FDA OCI) on June 20. The conspiracy involved illegitimate pricing and marketing of Zoladex, a drug for the treatment of prostate cancer. In one of these schemes, AstraZeneca provided thousands of free samples of Zoladex to physicians, knowing that they would charge their patients and insurance programs for the samples. Another illegal inducement used by the firm involved inflating the price of Zoladex reported to Medicare as the basis for reimbursement, while deeply discounting the actual price charged to the physicians. AstraZeneca also misreported and underpaid the Medicaid rebates it owed to the states for the use of Zoladex. The various schemes used by the firm caused multimillion-dollar losses to federally- and state-funded insurance programs and individual patients.

AstraZeneca pleaded guilty to criminal conspiracy to violate the Prescription Drug Marketing Act by causing Medicare, Medicaid and other federal providers to be overcharged for Zoladex that had been provided as free samples to urologists. As part of the plea agreement, the company agreed to pay a $63,872,156 criminal fine and to pay $266,127,844 to the U.S. government for claims filed with the Medicare, TriCare, Department of Defense and Railroad Retirement Board programs.

The investigation, which is continuing, also resulted in charges against three physicians of conspiring with AstraZeneca to bill patients and third-party payers for free Zoladex samples. Two of the prescribers have pleaded guilty.

Major pharmaceutical manufacturer AstraZeneca Pharmaceuticals LP pleaded guilty to a large-scale health care crime and agreed to pay $355 million to resolve the associated criminal charges and civil liabilities, according to an announcement released by the FDA Office of Criminal Investigations (FDA OCI) on June 20. The conspiracy involved illegitimate pricing and marketing of Zoladex, a drug for the treatment of prostate cancer. In one of these schemes, AstraZeneca provided thousands of free samples of Zoladex to physicians, knowing that they would charge their patients and insurance programs for the samples. Another illegal inducement used by the firm involved inflating the price of Zoladex reported to Medicare as the basis for reimbursement, while deeply discounting the actual price charged to the physicians. AstraZeneca also misreported and underpaid the Medicaid rebates it owed to the states for the use of Zoladex. The various schemes used by the firm caused multimillion-dollar losses to federally- and state-funded insurance programs and individual patients.

AstraZeneca pleaded guilty to criminal conspiracy to violate the Prescription Drug Marketing Act by causing Medicare, Medicaid and other federal providers to be overcharged for Zoladex that had been provided as free samples to urologists. As part of the plea agreement, the company agreed to pay a $63,872,156 criminal fine and to pay $266,127,844 to the U.S. government for claims filed with the Medicare, TriCare, Department of Defense and Railroad Retirement Board programs.

The investigation, which is continuing, also resulted in charges against three physicians of conspiring with AstraZeneca to bill patients and third-party payers for free Zoladex samples. Two of the prescribers have pleaded guilty.

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