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AZ settles marketing case for $520m

AstraZeneca has agreed to pay $520m to settle a federal investigation alleging that it marketed schizophrenia drug Seroquel for unapproved uses

AstraZeneca (AZ) has agreed to pay $520m to settle a federal investigation alleging that it marketed its schizophrenia drug Seroquel (quetiapine) for unapproved uses.

The British company will also sign a corporate 'integrity agreement' with the US government but is not subject to criminal charges, the New York Times has reported, citing two sources familiar with the case.

AZ was accused of misleading doctors and patients by playing up favourable research and not adequately disclosing studies that show Seroquel increases the risk of diabetes. Although doctors are permitted to prescribe any approved drug for off-label uses, it is illegal for pharma to promote medications for purposes not approved by the Food & Drug Administration (FDA).

The drug company faces more than 25,000 civil lawsuits filed on behalf of patients contending that the company did not disclose the drug's risks. It is also facing two federal investigations and two whistle-blower lawsuits related to Seroquel sales and marketing practices.

As a result of aggressive marketing, Seroquel has been prescribed to children and elderly people for indications not approved by the FDA. The drugs have caused rapid weight gain in children and other serious side-effects. Potentially related deaths have prompted warnings against giving the drugs to elderly patients for dementia.

AZ reported $4.9bn in Seroquel sales last year. First quarter results for 2010 will be reported this week.

AZ becomes the fourth pharmaceutical giant, after Pfizer, Eli Lilly and Bristol-Myers Squibb, in the last three years to admit to federal charges of illegal marketing of antipsychotic drugs.

27th April 2010

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