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AstraZeneca Frequently Asked Questions

General

What does the suit claim?
The suit claims that AstraZeneca (NYSE: AZN) fraudulently misled and conspired to convince current Prilosec® (also known as Losec) consumers to switch to Nexium®. Prilosec was AstraZeneca's most profitable drug, with global sales reaching $6 billion.

What was AstraZeneca's motivation?
This suit contends that Nexium was not an attempt to provide an improved drug, but a money-making ploy to market a drug remarkably similar to Prilosec and soften the substantial financial losses they were sure to incur with the expiration of the Prilosec patent and increased competition from generic drugs.

What tactics did AstraZeneca employ to market Nexium?
The complaint states that AstraZeneca advertised heavily to both Prilosec users and doctors, priced Nexium far below the cost of Prilosec, gave discounts to managed care plans and hospitals, barraged doctors with free samples and offered coupons in newspapers.

What did AstraZeneca's marketing materials for Nexium claim?
According to the complaint, AstraZeneca promoted Nexium as the "first PPI to offer significant clinical improvements over Losec in terms of acid control and efficacy" and claimed that Nexium was more effective in acid inhibition than other comparable drugs and provided relief in a shorter period of time. Nexium advertisements directed to physicians claimed that the new drug was more powerful than Prilosec, stating "we've captured the essence of Prilosec and created a new PPI (proton pump inhibitor)…introducing Nexium, the powerful new PPI from the makers of Prilosec … ."

Why were AstraZeneca's marketing claims problematic?
The complaint claims that AstraZeneca's marketing messages for Nexium are misleading. AstraZeneca's claims that Nexium is superior to Prilosec are based on clinical studies that compared 40mg of Nexium to 20mg of Prilosec, and found Nexium, even at twice the dose, to be only slightly more effective. The complaint argues that if the drugs were compared at standard doses, Nexium would not have been found more effective.

How did AstraZeneca's marketing artificially inflate consumer healthcare costs?
Studies show that pharmaceutical advertising directed at consumers is effective in causing patients to pressure doctors into prescribing new, expensive and marginally helpful new drugs. The complaint argues that had consumers been truthfully informed about the costs and benefits of Nexium compared to Prilosec, they would not have created such a demand for Nexium.

What does this suit seek to do?
This suit seeks to hold AstraZeneca responsible for its misleading advertising practices and repay consumers for damages incurred through the pharmaceutical company's deception.

Nexium

What is Nexium?
Nexium is a proton pump inhibitor ("PPI") or acid pump inhibitor that is used to treat heartburn and is a close chemical relative to Prilosec.

Is Nexium more effective than Prilosec?
The suit contends that there is no evidence proving that Nexium is more effective than Prilosec or other PPIs at comparable doses. In fact, clinical studies show that Nexium at twice the dose of Prilosec is only slightly more effective.

What do others say about Nexium?

• "You should be embarrassed if you prescribe Nexium because it increases costs with no medical benefits…. The fact is Nexium is Prilosec …it is the same drug. It is a mirror compound." (Thomas Sully, Center for Medicare & Medicaid Services (CMS) Director, addressing the American Medical Association)

• "Nexium is a game that is being played on the people who pay for drugs." (CMS Director Thomas Sully)

• "When optimal doses are used, Prilosec and generic omeprazole appear to be as effective as Nexium or any other PPI." (Managed Healthcare Executive April 1, 2004)

• "Nexium offers no innovation; the drug owes its existence entirely to AstraZeneca's need to retain the company's considerable share of the $8.3 billion PPI market." (HealthFacts)

• "Nexium…is virtually identical and…a generic is available for a price about 10 times less." (Los Angeles Times February 15, 2004)

The Lawsuit

Who are the defendants?
The defendants in this case are AstraZeneca P.L.C. and its subsidiaries - Zeneca Inc., AstraZeneca Pharmaceuticals L.P. and AstraZeneca U.S.

Who does the suit seek to represent?
This suit represents all persons in California who purchased Nexium in the past four years, and the plaintiffs with constituencies in California (American Federation of Labor & Congress of Industrial Organizations (AFL-CIO), Congress of California Seniors, and California Alliance for Retired Americans).

Why are consumer organizations filing a lawsuit against AstraZeneca?
The plaintiffs in this case are all members of the Prescription Access Litigation Project (PAL). PAL's mission is to make prescription drugs more affordable for consumers by putting an end to illegal pharmaceutical price inflation through class action litigation and public education. The plaintiffs in this case are filing a lawsuit against AstraZeneca, in order to force AstraZeneca to reimburse consumers who have paid a higher price for Nexium as a result of AstraZeneca's deceptive advertising and to prevent such deception from taking place in the future PAL and the members of its coalition are committed to bring public pressure to bear to force the pharmaceutical industry to make drugs affordable and to promote them honestly and fairly.

What does the suit seek?
The suit seeks equitable relief in the form of restitution and disgorgement of all unlawful or illegal profits received by AstraZeneca as a result of unfair, unlawful and deceptive marketing practices, appropriate injunctive relief and monetary restitution in line with costs and damages suffered by consumers.

Where was the lawsuit filed?
The lawsuit was filed in U.S. Superior Court in Los Angeles.

What laws does the suit claim the defendants violated?
The suit claims that AstraZeneca's deceptive marketing practices caused the company to benefit from Unjust Enrichment and that they violated the Unfair Competition Law, False Advertising Law, and Consumers Legal Remedy Act.

The Class Action Process

Who can participate in this suit? The class includes all persons in California who purchased Nexium in the past four years.

How many people are members of this class?
Tens, even hundreds of thousands of individuals and entities throughout California are included in this class.

How will signing up help the lawsuit?
A larger class helps strengthen the case for demonstrating the severity of damage that the defendants caused to consumers by their actions.

What do I need to do to join the class action?
To make sure you're included in any announcements about the suit, sign up for more information and updates.

How does a class action work?
A class-action lawsuit is filed when different people combine their lawsuits because the facts of the case are so similar. This is designed to save court time, and allow one judge to hear all the cases at the same time and make one decision binding to all parties.

Step 1: A lawyer files a lawsuit on behalf of one or more parties.

Step 2: A judge agrees the case is valid and certifies it.

Step 3: The judge directs notice be given to all parties having a similar claim during a particular time period so they may be informed and have input on the case. This first notice gives people an opportunity to "opt out" (not be part of the class or represented by the party who brought the case). Those who opt out have no further standing in the case and can either drop the matter or bring action on their own behalf. Individuals that stay a party in the case are usually bound by the settlement and prohibited from taking any further action on the matter.

Step 4: Unless a settlement occurs, the case could potentially proceed for years. It is either settled outside of court and presented to the court for its approval as to fairness (most often the case), or the case is tried and the judge renders a decision. If the plaintiffs (the class participants) win a judgment over the company being sued, they are notified about how they can collect damages or remedies.

Who can I contact if I have more questions?
If you have more questions about the lawsuit or your eligibility, contact attorneys Hagens Berman Sobol Shapiro at 206-623-7292 or info@hbsslaw.com.

For additional questions about trends in pharmaceutical marketing practices, and how consumers are fighting for affordable prices through litigation, contact Mike Gipstein at Community Catalyst's Prescription Access Litigation Project at (617) 275-2805 or gipstein@communitycatalyst.org.