child obesityOne of the world's largest drug companies, AstraZeneca, agreed to pay $520 million to settle a U.S. government lawsuit claiming the company encouraged doctors to prescribe an anti-psychotic drug to children, veterans and the elderly outside its intended use.

Seroquel is approved by the U.S. Food and Drug Administration to treat schizophrenia, bipolar disorder and depression. But the Justice Department said AstraZeneca, a British-Swedish company with U.S. headquarters in Delaware, suggested using it for anger management, sleeplessness, anxiety and Alzheimer's disease.

Assistance programs such as Medicare and Medicaid, as well as some insurance companies, won't pay for such use of drugs "off-label." That means they're not covered by FDA-approved labels, and because their use can pose serious health risks and command higher costs for consumers.

"Illegal acts by pharmaceutical companies and false claims against Medicare and Medicaid can put the public health at risk, corrupt medical decisions by health care providers, and take billions of dollars directly out of taxpayers' pockets," said Attorney General Eric Holder in a written statement.

Seroquel is controversial, along with other anti-psychotic drugs, for its potential to cause obesity in children and to increase risk of diabetes. A recent study published in the Journal of the American Medical Association found that children and adolescents taking antipsychotic drugs added between 8 and 15 percent to their body mass in only 11 weeks, sufficient for many to become obese. However, Seroquel does not carry a warning on its label, unlike Eli Lilly's Zyprexa, a similar blockbuster drug.

Antipsychotic drugs were the most lucrative class in 2009, with $14.6 billion in U.S. sales. Seroquel accounted for $2.2 billion, or 15%, of all U.S. antipsychotic drug sales that year.

Under the terms of the agreement, AstraZeneca is to pay nearly $302 million in civil penalties, with more than $218 million going back to Medicaid. Other government health care programs which processed payment claims for Seroquel include the Department of Veteran Affairs, the Federal Employee Health benefits Program and the Bureau of Prisons.

The company will also be required to post on its website information about payments to doctors, such as honoraria, travel or lodging. AstraZeneca flew doctors to resorts and paid them to "advise" the company about how to market Seroquel for unapproved uses, the lawsuit alleges. It compensated doctors for serving as purported authors of articles written by AstraZeneca, and for giving promotional lectures about unaccepted uses of the drug.

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