AstraZeneca announced on Monday, August 9, 2010, that it had reached an agreement to pay $198,000,000 in order to settle over half of the United States’ lawsuits concerning the drug Seroquel, which allegedly causes diabetes and other negative effects.
Out of the 26,000 plaintiffs bringing product liability suits against AstraZeneca, this agreement will cover approximately 17,500. On average this will mean a payment of just $11,314 per plaintiff. To date, 4,725 of the Seroquel cases have been disposed of. As of June, 2,900 cases have been dismissed and 1,825 were dismissed with prejudice, which means they can be re-filed.
Based in London, AstraZeneca, the world’s sixth-largest pharmaceutical manufacturer, stated that the eventual payouts will not affect its 2010 profit forecast. The future reported earnings per share are $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.”
Seroquel is among one of half dozen antipsychotic drugs that are heavily promoted and approved for use in schizophrenia and bipolar disorders. Still, Seroquel is widely prescribed for unapproved uses, such as depression and insomnia. Often Seroquel is inappropriately prescribed to children and elderly patients.
Generating sales of $4.9 billion last year, a full %15 of AstraZeneca’s revenue, Seroquel still remains its second biggest seller. These new antipsychotic treatments have risen to the industry’s seventh-best-selling class of drugs. Global sales have been reported to be more than $23 billion, representing a %50 increase in 4 years.
These settlements follow a July order from the United States ’ Food and Drug Administration ordering the company to cease using a promotional letter for Seroquel XR, an extended release version of the antipsychotic that doesn’t carry a diabetes warning.
Lawyers for claimants allege that AstraZeneca knew the dangers of Seroquel for years. AstraZeneca denies this allegation and has fought against internal company documents becoming public. AstraZeneca continues to reassure investors that the litigation over Seroquel will not cause substantial loss in revenue.
