AstraZeneca yesterday settled a five-year legal battle between its US division and the US Department of Justice over claims it provided kickbacks to Medco Health Solutions, for $7.9m ($5.2m).
The firm had been accused of giving kickbacks to Medco to ensure it kept sole and exclusive status for its Nexium heartburn medication on lists of approved medications. Federal investigators claimed that Medco was given price cuts on other drugs in return. Astrazeneca denies the allegations, despite the settlement.
The malpractice was alleged after two former employees at AstraZeneca, Paul DiMattia and F Folger Tuggle, filed a complaint against the company under federal law. Both whistleblowers will receive a large fee following the case. In America whistle-blowers are often paid large amounts of money in compensation for coming forward with their evidence.
The whistleblower’s action in 2010 came during a year in which AstraZeneca settled another dispute with the US government after it was accused of mislabeling the anti-psychotic drug Seroquel for uses not approved as safe and effective by the Food and Drug Administration, the industry regulator.
The settlement in 2010 was for $520m, making the current settlement seem modest in comparison.