Consumer Fraud

AstraZenca pays U.S. $7.9 million to settle whistleblower complaint

whistleblower 5 370x210 AstraZenca pays U.S. $7.9 million to settle whistleblower complaintLondon, England-based global drug maker AstraZeneca will pay the U.S. $7.9 million to settle a whistleblower complaint that it violated federal healthcare regulations by engaging in an illegal kickback scheme designed to boost sales of its acid reflux medication Nexium.

The complaint, filed on behalf of the U.S. government by former AstraZeneca employees Paul DiMattia and F. Folger Tuggle under the False Claims Act, alleges the multinational drug giant paid pharmacy benefit manager Medco Health Solutions for maintaining Nexium as the “sole and exclusive” prescription drug of its kind in Medco’s formularies.

AstraZeneca paid Medco in the form of discounts on other drugs, namely Prilosec, Toprol XL, and Plendil, the whistleblower complaint claimed, alleging that this scheme violated the Anti-Kickback Statute and resulted in a submission of false claims to the Retiree Drug Subsidy Program Medicare and other federally funded health care programs.

“Pharmaceutical companies that pay kickbacks in order to boost profits will be held accountable for their improper conduct,” said Department of Health and Human Services Special Agent Nick DiGiulio “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.”

Mr. DiMattia and Mr. Tuggle filed the lawsuit under the qui tam or “whistleblower” provisions of the False Claims Act, which authorizes private individuals to sue on behalf of the U.S. government. Whistleblowers whose False Claims Act complaints result in settlement or judgment are awarded a percentage of the total recovery. In this case, the whistleblower plainitffs will share an award of $1.42 million.

Source: U.S. Department of Justice