Attorney General's News Release

April 28, 2005

Nixon recovers $453,000 from pharmaceutical firm that overcharged Medicaid program for prostate cancer drug

Jefferson City, Mo. — Attorney General Jay Nixon today announced that AstraZeneca Pharmaceuticals has paid $453,466 to settle allegations that the company defrauded the state Medicaid program through the inflated pricing and inappropriate marketing of Zoladex, a drug used to treat prostate cancer.

Nixon and the Attorneys General of the other 49 states and the District of Columbia all entered into settlements totaling $24.9 million with AstraZeneca over the pricing and marketing of Zoladex. The company, based in Wilmington, Del., also reached a separate $355 million nationwide settlement in June 2003 with the U.S. Attorney for Delaware and the U. S. Department of Health and Human Services.

In the federal agreement, AstraZeneca pleaded guilty to criminal charges that it conspired to violate the Prescription Drug Marketing Act. AstraZeneca provided free samples of Zoladex to physicians, knowing and expecting that those samples would be billed to the Medicaid and Medicare programs. In addition, the company agreed to settle involving allegations that the company offered discounts to physicians to order Zoladex and advised the physicians to not report the discounts to the Medicaid and Medicare programs. As a result, the "average wholesale price" used to calculate the Medicaid and Medicare payments for the drug was inflated, costing taxpayers millions of dollars.

"This payment demonstrates our continued commitment to protect taxpayers from corporate greed," Nixon said. "We will aggressively pursue companies that attempt to defraud the state's healthcare system and recover money that was paid as a result of improper claims."

The state settlements covered the inflated prices paid by the Medicaid programs. Of the $453,466 recovered through Nixon's settlement with the company, Missouri's share totaled $184,779. The remainder will go to reimburse the federal government for its share of the state's Medicaid funding.

As part of the agreement with the state Attorneys General, AstraZeneca has agreed to cooperate with the states in investigations of individuals who supplied or received free Zoladex and who may have civil or criminal kickback liability under state law. In addition, the company will supply the state Medicaid program with pricing information on Zoladex and comparable products so that Medicaid pharmacy directors continue to receive more accurate pricing information.

Inquiries from consumers should be directed to consumer@ago.mo.gov or 1-800-392-8222 (from within Missouri) or 573-751-3321 (outside Missouri).

All media inquiries should be directed to Press Secretary John Fougere.

E-mail      Phone: 573-751-8844         Fax: 573-751-5818