March 28, 2006

AstraZeneca is under investigation by the U.S. Attorney's Office in Los Angeles for its field promotional activities, according to the company's annual SEC filing.

The investigation involves the company's "preparation and dissemination of patient education and similar materials to physicians," the company said in the filing.

"As is true for most, if not all, major prescription pharmaceutical companies operating in the U.S., AstraZeneca is currently involved in multiple U.S. federal and state criminal and civil investigations into drug marketing and pricing practices," the filing says.

But the company, which had 2005 sales of $24 billion, said it would not speculate as to the outcome of the investigation, "which could include the payment of damages and the imposition of fines, penalties and administrative remedies."

An AstraZeneca spokeswoman declined to elaborate further. "This is an ongoing investigation and we make it a practice not to comment on ongoing investigations," said Abigail Baron, manager of media relations.

The drug industry's promotional practices have been sharply criticized in recent years, with lawmakers repeatedly calling for reforms to direct-to-consumer (DTC) ads. Lawmakers and advocacy groups have argued that DTC advertising oversells benefits and undersells risks. Responding to such pressure, PhRMA in August 2005 issued a set of "guiding principles" for DTC ads, which includes a recommendation for firms to present their promotional materials to the FDA before releasing them.

AstraZeneca has been a vocal advocate for greater accuracy in promotional materials. The company in November 2005 called for mandatory FDA review of DTC ads, claiming PhRMA's principles on the issue didn't go far enough. The company said it would support legislation requiring mandatory FDA review of DTC advertisements, but only if the agency's Division of Drug Marketing, Advertising, and Communications (DDMAC) has the necessary resources to conduct its review within a specific time frame.

Even without the requirement, the number of advertising reviews lately has overwhelmed DDMAC. The FDA's ad oversight division has shifted from reviewing ads based on when they arrive to focusing first on newer claims. Specifically, the agency will focus first on ads for drugs that are new or have never been advertised on television, drugs used for new patient populations or new purposes, and instances where new risk information is available and there are new effectiveness claims.

AstraZeneca's SEC filing is available at http://www.sec.gov/Archives/edgar/data/901832/000095010306000565/dp02288_ex15-1.htm (http://www.sec.gov/Archives/edgar/data/901832/000095010306000565/dp02288_ex15-1.htm). (http://www.fdanews.com/did)