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Wednesday, February 11, 2015

AstraZeneca To Pay $7.9M To Settle Kickback Charges

On Feb. 11, 2015 the Department of Justice announced that AstraZeneca LP (NYSE: AZN), a pharmaceutical manufacturer, has settled kickback allegations. The company has agreed to pay $7.9 million in the settlement. "We will continue to pursue pharmaceutical companies that pay kickbacks to pharmacy benefit managers,” said Acting Assistant Attorney General Joyce R. Branda, according to the press release. He goes on to say that,  “Hidden financial agreements between drug manufacturers and pharmacy benefit managers can improperly influence which drugs are available to patients and the price paid for drugs.”

The lawsuit was originally filed by former employees of AstraZeneca who acted as whistle-blowers and received a combined $1.4 million. While this is a public health issue, it is also an issue within the pharmaceutical industry due to profitability targets.

“Pharmaceutical companies that pay kickbacks in order to boost profits will be held accountable for their improper conduct,” said Special Agent in Charge Nick DiGiulio in the press release.

The announcement gave the Health Care Fraud Prevention and Enforcement Action Team (HEAT) credit for the settlement and partnership between the two departments which was formally established in 2009. Since January 2009, according to the press release, the Justice Department has recovered more than $23.6 billion through False Claims Act cases, with $15.1 billion involving financial fraud against federal health care programs.

AZN was up $.19 to $68.44 today and is  trading up $.02 in after hours trading.