AstraZeneca to settle Seroquel US lawsuits

Seroquel

AstraZeneca, one of the UK's largest pharmaceutical firms, has agreed to settle around 17,500 US lawsuits over its Seroquel antipsychotic drug that could potentially cause diabetes.

It is alleged that AstraZeneca did not warn patients about the drug's side-effects and as such has agreed to pay out $198 million in compensation, a total that should amount to around $11,300 per patient.

The deal is currently an agreement in principle following court-ordered mediation. Non-monetary terms still need to be agreed with the claimants and other details are confidential, the company said in a statement.

The settlements follow a July order from the US Food and Drug Administration that the London-based company stopped using a promotional letter for Seroquel XR, an extended release version of the medicine, that doesn't carry a diabetes warning.

With the release of the lawsuit news, the pharma firm was quick to point out that "the mediation process is continuing in both federal and state jurisdictions". However the company could potentially end up paying even more, with rumours of as much as 26,000 claims. The payout news has drawn many potential claim outs out of the woodwork, with a large total being dismissed - 2,900 to date.

Despite this, in a statement AstraZeneca said, "We believe it was in the best interest of the company to explore resolving these cases through the mediation process. We remain committed to a strong defence effort, but will also continue to participate in good faith in court-ordered mediation."

Strong sales

While AstraZeneca may be a profitable earner, with shares rising 12 percent alone this year, the company has yet to make any specific provisions for the Seroquel payments.

However, it should not be too much of a problem for the company. Last year sales of Seroquel, which is also used in the treatment of schizophrenia and bipolar disorder, had total sales of nearly $4.9 billion - 15 percent of the company's global revenues. Seroquel is the company's second biggest seller after its Nexium ulcer drug.

The legal fallout from the drug clearly won't matter to AstraZeneca, because these figures show the company will still be in the black.

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