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VA, Tricare to get millions from settlement

NAPLES, Italy — Federal agencies including the Department of Veterans Affairs and Tricare stand to share more than $300 million following settlement of a fraud case brought by the Department of Justice against pharmaceutical company AstraZeneca.

The case centered around AstraZeneca’s marketing strategy for its anti-psychotic drug Seroquel, which was only approved by the Food and Drug Administration for use in treating bipolar disorder and schizophrenia, according to the justice department.

AstraZeneca, however, sold the drug to health care providers for a multitude of other conditions, including post-traumatic stress disorder, anger management, anxiety, sleeplessness, dementia, depression and others, according to the settlement agreement.

The company settled the suit for $522 million. In addition to the VA and Tricare, settlement funds go to state Medicaid programs, according to the justice department.

Tricare officials said their agency will get about $4.7 million of the settlement, which will be returned to the general Tricare Benefit fund.

"A small percentage of the fines and penalties is returned to Department of Justice to support further fraud efforts, a portion goes to the HHS-OIG fund to support fraud investigations and the remainder goes to the Medicare Trust Fund," said Tricare spokesman Austin Camacho.

Doctors can prescribe drugs for uses other than what the FDA has approved. This is a fairly common practice, according to the DOD pharmacy agency, which cites a report on its Pharmacoeconomic Center website indicating "some 40% to 60% of all prescriptions are for uses the FDA has not approved."

Marketing drugs for uses that haven’t been approved by the FDA is known is "off-label" use. While off-label prescriptions are legal, off-label marketing isn’t.

"It’s fraud," Charles Miller, a Justice Department spokesman, said on Wednesday. "It is a matter of overbilling, in the sense that [drug companies] are seeking and receiving reimbursement for (uses of) a drug that was not FDA approved."

The suit also contended AstraZeneca paid doctors to pose as authors of medical articles that were actually ghostwritten by company agents touting the efficacy of Seroquel for non-FDA approved uses, according to the settlement agreement. The government also charged the company for violating the federal Anti-Kickback Statute by paying doctors to travel to resort areas where they would advise the company about off-label marketing for the drug, according to the agreement.

According to the terms of the agreement, AstraZeneca admits no wrongdoing, but has to enter into a five-year Corporate Integrity Agreement that forces closer scrutiny of company practices.

Under the agreement, the company must notify doctors about the settlement, and post information on its website about travel, lodging and gratuity payments made to doctors. Non-compliance with the agreement could result in the company’s exclusion from doing business with federal health care programs.


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