AstraZeneca inks $198M deal to settle US lawsuits alleging antipsychotic drug caused diabetesBy AP
Monday, August 9, 2010
AstraZeneca to pay $198M to settle Seroquel suits
LONDON — AstraZeneca PLC said Monday it has reached agreements to pay a modest $198 million to settle a little over half of the U.S. lawsuits that allege its antipsychotic drug Seroquel caused diabetes and other harm.
AstraZeneca said the agreements cover roughly 17,500 claimants, out of the remaining 26,100 plaintiffs who have brought product liability lawsuits. That works out to an average of just $11,314 per plaintiff. The company has already disposed of 4,725 Seroquel cases.
The London-based company, the world’s sixth-largest drugmaker by revenue, said the eventual payouts won’t affect its 2010 profit forecast, which calls for earnings per share of $6.35 to $6.65.
“While the terms remain confidential and are subject to non-monetary agreements, we believe it was in the best interest of the company to explore resolving these cases through the mediation process,” company spokesman Tony Jewell told The Associated Press. “We remain committed to a strong defense effort, but will also continue to participate in good faith in court-ordered mediation.”
Despite all the lawsuits, Seroquel is still AstraZeneca’s second-biggest seller after its Nexium ulcer drug. Seroquel generated sales of $4.9 billion last year, or 15 percent of the company’s revenue.
It and about a half-dozen other powerful, heavily promoted psychiatric drugs that are officially approved for treating schizophrenia and bipolar disorder are widely prescribed for unapproved uses, including depression and insomnia. They also have been inappropriately given to some children and elderly patients.
All that so-called “off-label” use has made these newer antipsychotic treatments the industry’s seventh-best-selling class of drugs, with global sales last year of more than $23 billion. That’s up 50 percent in just four years.
AstraZeneca’s new settlements follow a July order from the U.S. Food and Drug Adminisation that the company stop using a promotional letter for Seroquel XR — an extended release version of the medicine — that doesn’t carry a diabetes warning.
Lawyers for many patients who took Seroquel have alleged that AstraZeneca officials kept its dangers secret for years.
The company has denied that repeatedly, and has fought hard to keep internal company documents about the drug’s risks from becoming public. It also has gone to great pains to reassure investors that the litigation won’t be a big hit to the company — unlike the $4.85 billion that American rival Merck & Co. paid out to settle product liability suits over its former pain reliever Vioxx.
As of the end of June, 2,900 cases have been dismissed by court order or agreement between AstraZeneca and the plaintiffs. Another 1,825 cases were dismissed with prejudice, which means they can be refiled later.
AP Business Writer Linda A. Johnson in Trenton, N.J., contributed to this report.
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