WASHINGTON (AP) — AstraZeneca will pay $68.5 million as part
of a multistate settlement over allegations that the drug developer promoted
its blockbuster psychiatric drug Seroquel for insomnia, Alzheimer’s and other
The New Jersey Attorney General’s Office announced the
agreement Thursday, describing it as the largest multistate pharmaceutical
settlement of its kind. New Jersey will
receive $1.85 million from the deal with 36 other states and the District of Columbia as
party to the settlement.
The states alleged that salespeople for AstraZeneca promoted
its anti-psychotic Seroquel for off-label, or unapproved uses, and did not
disclose side effects of the pill, which include weight gain and muscle spasms.
“Consumers rightfully expect pharmaceutical companies
to engage in responsible marketing efforts that are consistent with approved
purposes,” said Thomas Calcagni, acting director of New Jersey’s division of consumer affairs.
Seroquel is approved to treat schizophrenia, bipolar
disorder and depression, though the majority prescriptions are for off-label
uses like insomnia. The drug, approved in 1997, is AstraZeneca’s
second-best-selling product, with U.S. sales of $5.3 billion last
year. But that success has been marred by frequent allegations that the company
illegally marketed the drug and downplayed its risks.
Seroquel’s side effects, including blood sugar increases,
weight gain and uncontrollable muscle spasms, have resulted in thousands of
lawsuits from patients. The drugmaker had settled nearly 25,000 personal injury
lawsuits related to Seroquel at the end of 2010, with 3,950 remaining.
Pharmaceutical companies are prohibited from marketing drugs
for unapproved uses, though doctors are free to prescribe them as they choose.
London-based AstraZeneca denied any wrongdoing.
“While we deny the allegations, AstraZeneca believes it
is important to bring these matters to a close and move forward with our
business of providing medicines to patients,” said company spokesman Tony
Jewell, in a statement.
Thursday’s deal is the second multimillion-dollar Seroquel
settlement brought by government prosecutors in the past two years. Last April
AstraZeneca agreed to pay $520 million to settle similar allegations brought by
the federal Department of Justice.
The new settlement stemmed from a separate three-year
investigation led by the Attorney General of New Jersey. As part of the
agreement AstraZeneca must publish any gifts or payments to physicians on a
public website. The company also agreed to make sure that payment incentives to
sales representatives do not encourage off-label promotion.
Allegations of off-label drug marketing have become
increasingly common in the past decade, with the drug industry eclipsing all
others as the source of fraud-related settlements with the federal government.
Approximately 80 percent of the $3.1 billion in penalties collected last fiscal
year by the government came from the health care sector, including drugmakers,
insurers and hospitals, according to Taxpayers Against Fraud.