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Pharmaceutical giant AstraZeneca will pay the government $7.9 million to settle allegations that it engaged in a kickback scheme regarding its drug Nexium, the U.S. Department of Justice announced on Wednesday.
AstraZeneca allegedly paid the kickbacks to boost profits and caused the submission of false or fraudulent claims for Nexium to the Retiree Drug Subsidy Program, The DOJ said in a statement.
The complaint said AstraZeneca paid Medco Health Solutions, a pharmacy benefit manager, in exchange for Medco maintaining Nexium’s “sole and exclusive” status on certain Medco formularies and through other marketing activities, according to the settlement agreement.
The DOJ alleged that AstraZeneca provided some or all of the payment to Medco through price concessions on drugs other than Nexium, namely on Prilosec, Toprol XL and Plendil, it said.
Two former AstraZeneca employees brought forward the allegations and filed the lawsuit against the company, according to the U.S. Justice Department.
The civil settlement resolves the lawsuit filed under the whistleblower provision of the False Claims Act, which allows private citizens with knowledge of false claims to bring civil actions on behalf of the government and to share in any recovery.
Whistleblowers Paul DiMattia and F. Folger Tuggle will collectively receive $1,422,000, according to the Justice Department.
The kickback arrangement between AstraZeneca and Medco violated the Federal Anti-Kickback statute and caused the submission of false or fraudulent claims for Nexium, according to federal officials.
“Hidden financial agreements between drug manufacturers and pharmacy benefit managers can improperly influence which drugs are available to patients and the price paid for drugs,” said Acting Assistant Attorney General Joyce R. Branda.
The settlement means the claims will remain allegations only and does not represent a determination of liability, officials said.
Since January 2009, the Justice Department has recovered a total of more than $23.6 billion through False Claims Act cases, with more than $15.1 billion of that amount recovered in cases involving fraud against federal health care programs, according to the release.
Reduction of Medicare and Medicaid financial fraud has been aided by enhanced cooperation between the Attorney General’s Office and the Secretary of Health and Human Services through the formation in 2009 of a Health Care Fraud Prevention and Enforcement Action Team.
The settlement with AstraZeneca was the result of a coordinated effort among the Civil Division, the U.S. Attorney’s Office for the District of Delaware, the HHS-OIG, the U.S. Postal Service’s Office of Inspector General and the FBI Wilmington, Delaware, Resident Agency Office and the FBI’s Major Provider Response Team.
“We will continue to crack down on kickback arrangements, which can undermine drug choices for patients and corrode the public’s trust in the healthcare system,” said Special Agent in Charge Nick DiGiulio of the U.S. Department of Health and Human Services Office of Inspector General.