Profiting From Bad Conduct — AstraZeneca Fined Millions by the FDA

AstraZeneca has agreed to pay fines totaling $520 million in settlement of charges made by the Food & Drug Administration (FDA) that AstraZeneca illegally marketed Seroquel; a prescription drug used for the treatment of schizophrenia.

Although Seroquel had not been approved by the FDA, AstraZeneca marketed and continued to market the drug for sometime after it was warned. The FDA says AstraZeneca wrongly made claims that Seroquel was appropriate for the treatment of:

• Alzheimer’s diseases
• Anxiety
• Dementia
• Depression
• Post-Traumatic Stress Disorder

To read some of the news surrounding the marketing of this drug, drug companies must use the same “play book” that Big Tobacco has used all these years.

The FDA says that not only did AstraZeneca violate promotional regulations of the drug; they also apparently are guilty of paying doctors to sign articles promoting the drug. The articles were actually written by employees or agents of AstraZeneca and the fees paid to physicians were largely to put their name on the article. That practice is called ghost writing and it is a practice that has been engaged in by pharmaceutical companies in the past as a way of artificially validating their drugs. In the world of “Joe Citizen” the practice of ghostwriting is also referred to as lying, cheating, an, well let’s just say it, fraud.

As early as 1998 (12 years ago), the FDA cited AstraZeneca for bad practices in connection with Seroquel:

• Minimizing the risk of ocular injury secondary to the use of Seroquel. In fact, actual claims that ocular injuries thought to be associated with the use of Seroquel were actually caused by other causes;
• Claiming that Seroquel is effective in the treatment of a broader range of mental disorders than the drug was approved to treat; without “adequate and well controlled studies”.
• Distribution of materials discussing how Seroquel works when AsrtraZeneca knew that the mechanism of action of antipsychotic drugs, including Seroquel, is unknown.
• Distributing informational materials related to Seroquel without including important warnings and precautions about the drug, including: risk of neuroleptic malignant syndrome; risk of tardive dyskinesia; risk of orthostatic hypotension; risk of cataract development;and risk of seizures.

It is estimated that AstraZeneca had annual sales of Seroquel in the amount of $2.8 billion and had been selling the drug since 1997. That is 12 years and total sales of $33.6 billion. So the fine levied by the FDA represents 1.5% of the total sales for the drug Seroquel.

An analysis of risk vs. benefit might lead drug manufacturers to the conclusion that misleading labels, incomplete warnings, and inadequate clinical testing can be sensationally profitable. It is the corporate “bean counter” mentality: my product kills or injures X number of people; the value of each of their claims is Y; I can continue selling the product for Z years; and, even with paying out lawsuits and FDA fines, I still can turn a profit of $______ billions of dollars.

When will corporate America decide that violating regulations and ignoring the injuries they cause is not the way to being a good corporate citizen? When will penalties against corporations who flagrantly disregard the law rise to a level where corporations can no longer afford to operate under the “bean counter” principles, because it will no longer be profitable?