Astra Zenica pleads guilty to Fraud-Prostate Drug Zoladex

[Guest guest]

Drug firm agrees to big penaltyAstraZeneca will pay $355m to settle drug fraud chargesBy Alice Dembner, Globe Staff, rug maker AstraZeneca agreed to the second largest settlement for alleged drug fraud in US history yesterday, paying $355 million to resolve criminal and civil allegations that the company inflated the price of its prostate cancer drug and bribed doctors to prescribe it. The settlement, announced by federal prosecutors in Delaware, is second only to the record $885 million paid by TAP Pharmaceutical Products in 2001 to settle similar allegations in a Boston case. During the 1990s, the two companies battled to gain sales for their competing prostate cancer drugs, using tactics that included leveraging federal money to provide kickbacks to doctors.''Like the TAP case, it's going to send the message to the drug industry that they should be marketing the drug based on what's best for the patient rather than how much profit the doctor will be making,'' said Beth Moskow-Schnoll, the assistant US attorney who prosecuted the case. ''Everything they did was based on corporate greed. The Medicare system shouldn't be used to put profit into doctor's pockets.''AstraZeneca, whose US headquarters are in Delaware, pleaded guilty yesterday to criminally defrauding the government of more than $39 million by providing doctors across the country with thousands of free samples of Zoladex, knowing that the doctors would bill government insurance programs as much as $300 for each sample. The company will pay a criminal fine of $63.8 million.The settlement also includes $291 million to settle civil allegations that the company denies. Prosecutors alleged the London-based company deliberately inflated the price paid by the government for every dose of Zoladex, that it provided doctors with grants, trips, and speaking fees to induce them to prescribe the drug, and that it defrauded state Medicaid programs by failing to give them the lowest price charged any customer for the drug.''We did today plead guilty to conspiracy to violate the Prescription Drug Marketing Act,'' said company spokeswoman Rachel Bloom-Baglin. ''We are accepting responsibility and regret that those activities did occur. However, AstraZeneca believes that our pricing for Zoladex was at all times lawful.''As in the TAP case, the government alleged that AstraZeneca had persuaded doctors to prescribe Zoladex by showing them that they could make a profit on each dose, not only by selling free samples, but by charging the government far more for the drugs than they paid to purchase them. The drugs, administered by injection in a doctor's office, are among the few now reimbursed through the Medicare program.''They were in a competition to see who could cheat the most and drive the price up the highest to get the doctors to use their drug,'' said James Moorman, executive director of Taxpayers Against Fraud, a Washington-based group that aids whistle-blowers. ''Cheating didn't just get them more money, it got them more market share. The good news is it's going to stop, or they're going to pay an enormous price.''Although prosecutors in Boston are pressing criminal charges against TAP officials, Moskow-Schnoll in Delaware said there would be no prosecution of AstraZeneca officials because investigators could find no evidence that the actions were sanctioned by top management. She said the investigation will continue into doctors across the country who benefited from the fraud. Two doctors have already pleaded guilty to conspiracy charges and a third was charged last month.The company has agreed to cooperate in those investigations and to promote ethical and legal sales and marketing practices.The case began in 1996 when a TAP sales vice president quit his job and blew the whistle on practices he considered unethical at both TAP and rival AstraZeneca. For alerting prosecutors to the fraud, Douglas Durand will receive a reward of $47.5 million in the AstraZeneca case on top of the $78 million he got in the TAP case. Durand, 51, has retired in Florida and is using some of the money to support cancer research, according to his lawyer Elizabeth Ainslie.Alice Dembner can be reached at Dembner@g...This story ran on page C1 of the Boston Globe