Zoeller: Illegal off-label marketing of antipsychotic drug Seroquel led to whistleblower case

INDIANAPOLIS – Today, the State of Indiana received a check for more than $4.4 million, a settlement from a pharmaceutical company to resolve whistleblower lawsuits filed over illegal off-label marketing of its prescription anti-psychotic drug and to reimburse public funds wrongly paid out, Attorney General Greg Zoeller announced.

AstraZeneca Pharmaceuticals LP agreed last April 28 to pay several state governments and the federal government a combined $520 million in damages and penalties to reimburse Medicaid and other federal health care programs for losses suffered as a result of its off-label marketing of its drug Seroquel. Under the settlement of the whistleblower lawsuits with AstraZeneca, the total settlement obtained for the Indiana Medicaid program – including both the federal and state portions – is $11,754,952.81 in restitution and other recovery. Out of that, Indiana’s share of the multi-state settlement is $4,446,935.30.

The settlement check to reimburse Medicaid, made out September 23 to the Indiana Family & Social Services Administration (FSSA), arrived at the Attorney General’s Medicaid Fraud Control Unit (MFCU) office today and was deposited. The amount includes $4,402,510.12 announced in April — with half for Medicaid restitution only and half for additional recoveries — plus $44,425.18 in interest accrued since then.

Under the False Claims Act, whistleblowers who expose Medicaid fraud are able to share in a percentage of the funds recovered, through what is known as qui tam (pronounced “key tam”) litigation.

“Whistleblower lawsuits allow private citizens with insider knowledge of fraud within a company to act on behalf of the government by filing suit in order to recover public funds wrongly spent on fraudulent Medicaid claims,” Zoeller said. “The resolution of this case reimburses the Indiana Medicaid program, and it’s a good example of how the courage of whistleblowers in coming forward has helped to counteract health care fraud,” Zoeller said.

Seroquel is one of a newer generation of atypical antipsychotic medications approved by the U.S. Food and Drug Administration for use in treating psychological disorders, such as bipolar disorder, in adults. The whistleblowers – and later the federal and state governments – had alleged that over six years, between January 1, 2001, and December 31, 2006, AstraZeneca engaged in off-label marketing to improperly promote Seroquel for uses the FDA had not approved, such as aggression, Alzheimer’s disorder, anger management, anxiety, attention deficit-hyperactivity disorder, dementia and sleeplessness.

The cases alleged the company offered inducements to psychiatrists and primary-care physicians to prescribe Seroquel. Those included illegal payments or kickbacks; junkets where the company paid doctors’ admission to resort locations to “advise” AstraZeneca about marketing the unapproved uses; articles doctors could “author” that were written by AstraZeneca and its agents; and opportunities to conduct studies for unapproved uses of the drug.

As a result of illegal promotional activities, physicians prescribed Seroquel for children, adolescents and dementia patients in long-term care facilities and then sought Medicaid reimbursement — even though those were not medically accepted circumstances under which state Medicaid programs could approve reimbursement for that drug, the complaints alleged.

Filed in U.S. District Court for the Eastern District of Pennsylvania by two private individuals – a Pennsylvania resident and a California resident – the cases remained under seal while they were investigated by state and federal governments. States and the federal government later intervened in the suits to recover Medicaid funds and other funds wrongly paid out. To resolve the allegations, AstraZeneca and the federal and state governments reached a settlement April 28, although it took until this month for the settlement check to be processed and be issued to Indiana. The two whistleblowers received approximately 15 percent of the federal share of the damages. Indiana will not have to forward any of its reimbursement proceeds to the whistleblowers; their recovery previously was distributed.

The total AstraZeneca settlement nationwide announced in April was $520 million, with the Medicaid program (both the states’ shares and federal share) receiving $458,660,342. The remaining $61,339,658 was designated for other federal health care programs affected by the company’s conduct, under the agreement.

Under the settlement, the Wilmington, Del.-based AstraZeneca entered into a Corporate Integrity Agreement with the U.S. Department of Health and Human Services’ Office of Inspector General, which will monitor closely the company’s future marketing and sales practices.

The False Claims Act has existed in federal and state law for years and applies to fraud on all government contracts such as highway and defense contracts, not just health care and pharmaceutical companies. The federal False Claims Act exists to collect federal funds, while the similar Indiana statute is for recovering state funds. Although there are basic notice requirements for employees, the availability of filing whistleblower actions is not well known to the general public or health care workers.

To encourage whistleblowers to file and in turn expose health care fraud, Zoeller this summer has raised public awareness of the False Claims Act through informational meetings, a promotional handout, Web content and outreach to plaintiffs’ attorneys who file such cases initially. The effort is overseen by Deputy Attorney General Allen K. Pope, director of the MFCU. Supervising Deputy Attorney General Steve Hunt and Deputy Attorney General Nicholas Gonzales this year have made several presentations about whistleblower lawsuits to meetings of health care employee associations and gatherings of nursing students entering the workforce.

In previous False Claims Act cases the multimillion-dollar settlement payments made by companies to reimburse public funds that were lost to fraud meant whistleblowers who received a percentage also collected millions of dollars individually.

Any health care and pharmaceutical workers who know about fraud and are interested in filing a whistleblower action should first contact a private attorney who specializes in bringing lawsuits under the False Claims Act. There is no guarantee of the individual recovering damages; but filing a private lawsuit is a necessary step in order for states or the federal government to investigate a fraud case and intervene in court.

Below are links to legal referral services that can steer individuals to private attorneys who can represent them in filing a private whistleblower lawsuit. These websites are for informational purposes only and the Attorney’s General Office does not endorse or verify any of these websites:

http://www.taf.org

http://www.whistleblowercenter.com/

http://www.whistleblowers.org

Zoeller’s effort to combat fraud on Medicaid by encouraging private plaintiffs to file whistleblower lawsuits takes place as he recently was named co-chairman of the Consumer Protection Committee of the National Association of Attorneys General (NAAG). In that position, Zoeller has a national role in the fight against identity theft, foreclosure scams, deceptive business practices and other financial fraud schemes. The committee works to support multi-state consumer protection efforts, coordinate training opportunities for law enforcement and promote information exchanges among states and federal agencies to aid in investigations.

Zoeller urges anyone interested in bringing a whistleblower action to learn more about the process by visiting his web site, www.in.gov/attorneygeneral/2807.htm