Friday, February 16, 2007

Accusations Against AZ

It also was not a happy week for UK pharmaceutical company AstraZeneca.

On one hand, as reported by Bloomberg news, the company is now the subject of thousands of lawsuits about its marketing of the atypical anti-psychotic drug Seroquel (quetiapine). From the Bloomberg report,

AstraZeneca Plc, the U.K.'s second- largest drugmaker, has been sued by almost 10,000 people in the U.S. over claimed injuries from defects in the company's antipsychotic drug Seroquel, according to a court filing.

Patients claim in their complaints that AstraZeneca didn't adequately warn of possible side effects, including severe weight gain and risk of diabetes. Many of the suits contend the London- based company and its affiliates promoted the drug for unapproved uses, contrary to U.S. Food and Drug Administration regulations.

The lawsuits are similar to claims filed over injuries from the antipsychotic drug Zyprexa against Eli Lilly & Co., which has settled more than 28,000 cases for as much as $1.2 billion.

The growth in sales of the drug, from $66 million in 1998 to $2.75 billion in 2005, was spurred by 'AstraZeneca's aggressive marketing of Seroquel,' according to these patients, whose cases have been transferred to federal court in Orlando.

The marketing 'consisted chiefly of overstating the drug's uses and benefits (including massive off-label promotion), while understating and consciously concealing its life-threatening side effects,' their complaint said.

There are no defects in Seroquel, and AstraZeneca doesn't intend to settle the suits, company spokesman Jim Minnick said.

'We are vigorously defending them all,' he said in an interview. 'We believe Seroquel is safe and effective.'

On the other hand, the company was just accused of being one of the many companies, including some prominent pharmaceutical companies, involved in the oil-for-food sanctions scandal. According to the UK Guardian,

The Serious Fraud Office has launched an investigation into allegations that a number of major UK-based firms paid bribes to Saddam Hussein's regime in Iraq. The firms being targeted include the drug giants GlaxoSmithKline (GSK), AstraZeneca and Eli Lilly. The international oil traders and UK bridge-builders Mabey and Johnson are also to be investigated.

They are on a long list of international companies accused in a UN report of paying kickbacks under the discredited oil-for-food sanctions regime, which enabled Saddam to illicitly amass an estimated $1.8bn. Ministers have agreed to fund the investigation with £22m over three years.

The inquiry was ordered last week by the SFO director, Robert Wardle. Yesterday the agency confirmed: 'The director of the SFO has opened an investigation centred on alleged breaches of sanctions in respect of the UN oil-for-food programme.'

The investigation - the first official inquiry into the oil-for-food scandal - was urged on the British government by Paul Volcker, a former chairman of the US Federal Reserve, who compiled a UN report, delivered two years ago, into abuses of the programme after investigating the sanctions regime that enabled Saddam to survive for so long.

Mr Volcker said the programme - in which Iraq was only allowed to sell limited amounts of oil abroad to buy food and medicines - had become corrupted as the Saddam regime demanded kickbacks from foreign companies in return for the contracts. He identified French and Russian politicians as the chief culprits.

Mr Volcker said the kickbacks were disguised by various subterfuges. Contracts were inflated, usually by 10% to cover so-called "after-sales services" fees. More than 2,200 companies were listed, using evidence drawn from banking records and Iraqi government documents.

The inquiry will draw on Mr Volcker's evidence. He accused GSK of paying kickbacks worth $1m to win nine contracts valued at $11.9m to supply medicines. Yesterday GSK denied any wrongdoing.

AstraZeneca was named as having paid bribes of $162,000 to secure three contracts worth $2.9m. The company said: 'We deny any allegation of unethical behaviour on our part in our trading relationships with Iraq.'

Another company, Eli Lilly, was accused of securing a $3.2m contract with a bribe of $343,000. It said: 'Eli Lilly and Company ... denies any wrongdoing with regard to the oil-for-food scheme.'

It's odd how the companies mentioned in this report have all been recently accused of questionable marketing practices employed to promote blockbuster psychoactive drugs. (See our most recent post on GlaxoSmithKline and Seroxat or Paxil, and our most recent post on Eli Lilly and Zyprexa.)

Again, if the pharmaceutical industry wants to improve its reputation for marketing excess, the companies involved need to resolve these current accusations quickly, and start reassuring patients and health care professionals that they will clean up their marketing act. Maybe they should consider shifting their balance of internal power from the go-go marketers, back to the scientists and physicians within the companies?

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