AZ to settle Nexium kickback case for $7.9M
- AstraZeneca (AZ) was charged with paying millions to maintain exlusive status for Nexium on Medco's formulary of government-funded drugs.
- In a quid pro qui arrangement, AZ gave Medco, a pharmacy benefits manager (PBM), price breaks on other frugs, including Prilosec (for heartburn) and Toprol XL and Plendil (both for hypertension).
- Although AZ settled with the U.S. government for $7.9 million, it has not admitted to any wrongdoing.
Allegations of secret negotiations between PBMs and pharmaceutical companies are very serious, because these types of deals end up costing consumers money and influence which drugs are available to patients, even if the available drugs are not the best treatment option. The allegations arose from a whistleblower complaint against AZ in 2010 by two former employees, Paul DiMattia and F. Folger Tuggle. They lodged their complaint based on a federal law that allows private citizens who have knowledge of false claims to bring civil actions on the government's behalf. Now that the case is settled, both DiMattia and Folger will benefit and will end up splitting $1.422 million from the overall settlement.