Drugmaker AstraZeneca PLC said Thursday that it would put aside $350 million to cover a likely settlement of a U.S. Department of Justice investigation into the company’s marketing practices for its prostate cancer drug Zoladex during the mid-1990s.
London-based AstraZeneca’s U.S. subsidiary has been in settlement talks for several months with federal prosecutors who are investigating a health-care fraud case similar to the one brought against Lake Forest-based TAP Pharmaceuticals Products Inc., maker of a rival prostate cancer drug.
In 2001, TAP paid a record $875 million settlement and pleaded guilty to a criminal charge of conspiring with doctors in the mid-1990s to bill government insurers for Lupron, a rival treatment to AstraZeneca’s Zoladex.
TAP is a joint venture of Abbott Laboratories of North Chicago and Japan’s Takeda Chemical Industries. Neither company has been charged with any wrongdoing.
“Although no final agreement has been concluded, the company believes it appropriate to accrue $350 million to cover estimated settlement costs,” AstraZeneca said in its fourth-quarter earnings statement, which was released Thursday.
Although neither AstraZeneca nor federal prosecutors would comment about specifics of the settlement under discussion, AstraZeneca said the criminal and civil allegations involve “improper submissions of claims to the Medicare and Medicaid programs.”
Last year, one New Jersey urologist pleaded guilty to conspiring with AstraZeneca to bill patients and insurance companies for free samples of Zoladex, federal prosecutors in Delaware have said.
The allegations against both TAP and AstraZeneca occurred at a time when both companies were engaged in a fierce marketing battle to sell their drugs, which are among the leading U.S. treatments for prostate cancer.
In the TAP case, 14 current and former TAP employees and five physicians have been charged in the investigation into the company’s marketing practices involving Lupron.
