AstraZeneca (LON:AZN) has agreed to pay $110 million to the state of Texas to settle lawsuits alleging that it falsely and misleadingly marketed two of its drugs in violation of the state’s Medicaid Fraud Prevention Act, Texas’ attorney general has said. Bloomberg meanwhile reports that the Anglo-Swedish drugmaker has not admitted fault.
AstraZeneca’s share price has fallen into the red in today’s session, having given up 0.45 percent to 5,908.00p as of 08:51 BST. The stock is underperforming the broader UK market, with the benchmark FTSE 100 index having climbed into positive territory and currently standing 0.31 percent higher at 7,742.76 points.
AstraZeneca to pay $110m to Texas
Texas Attorney General Ken Paxton announced in a statement yesterday that AstraZeneca had agreed to pay $110 million to settle allegations that it violated the state’s Medicaid Fraud Prevention Act by promoting its antipsychotic medication Seroquel and cholesterol-lowering statin drug Crestor for uses not approved by the US Food and Drug Administration. Such practices are commonly referred to as ‘off-label marketing’.
“AstraZeneca makes no concessions or admissions of fault in the settlement agreements,’’ the FTSE 100 company said in a statement, as quoted by Bloomberg which first reported the settlement. “While AstraZeneca denies the allegations, it is in the best interests of the company to resolve these matters and to move forward.’’ The newswire noted that the deal resolves the suits, dating back to 2013, at a fraction of the $5 billion which the state had sought.
Analysts on Anglo-Swedish drugmaker
JPMorgan Chase & Co reaffirmed AstraZeneca as an ‘overweight’ yesterday, valuing the shares at 6,500p, while Shore Capital reiterated its ‘neutral’ stance on the blue-chip drugmaker last week, without specifying a price target on the stock. According to MarketBeat, the company currently has a consensus ‘buy’ rating and an average valuation of 5,631.52p.