Consumers Sue AstraZeneca Over Nexium Ad Campaign

October 19, 2004

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Consumers of the heartburn medication Nexium are suing the drug's distributor, AstraZeneca, alleging the pharmaceutical company sought to preserve market share and profits as the patent on their blockbuster drug, Prilosec, was set to expire, by initiating a massive and misleading advertising and promotional campaign to deceive consumers into purchasing Nexium, a nearly identical new drug.

Filed in U.S. Superior Court in Los Angeles, the suit contends that the core of AstraZeneca's scheme was to use misleading information to convince consumers that Nexium was a significantly better drug than Prilosec.

The pharmaceutical planned to redirect consumer loyalty from the flagship drug Prilosec to Nexium before the expiration of Prilosec's U.S. patent and the onslaught of competition from generic manufacturers that would deprive AstraZeneca of significant profits, the suit charges.

"AstraZeneca knew that with the expiration of their Prilosec patent, they would lose market share and profits. We intend to show that they initiated a plan to deceive consumers and recoup those lost revenues," said Steve Berman, lead attorney for the plaintiffs. "This suit is a response to their deception and is a message to AstraZeneca and all pharmaceutical companies that they will be accountable to consumers for their actions."

The suit is brought by the AFL-CIO, the Congress of California Seniors, and the California Alliance for Retired Americans and seeks to be classified as a class action on behalf of consumers nationwide who purchased Nexium. All three of the organizations are members of the Prescription Access Litigation Project (PAL), a national coalition of 100 consumer organizations dedicated to fighting illegal pharmaceutical price inflation through class-action litigation.

"More and more workers cannot get the healthcare they need, and out-of-control drug prices are a huge factor," said Gerry Shea, AFL-CIO's director of governmental affairs. "The AFL-CIO is joining the Prescription Access Litigation Project and the suit against AstraZeneca because it's high time that drug companies were held accountable for deceiving American consumers into buying 'new' drugs they don't need at prices they can't afford."

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Prilosec (also known as Losec) is a proton-pump inhibitor (PPI) used to treat heartburn and was AstraZeneca's most profitable drug. By 2000, Prilosec was the most prescribed drug in the world, with global sales reaching $6 billion. But with Prilosec's patent set to expire in 2001, its loss of brand name protection and assured competition from generic drug manufacturers posed a financial vulnerability to the pharmaceutical company.

According to the suit, AstraZeneca responded to this financial threat by launching a massive advertising campaign to overshadow the perceived effectiveness of Prilosec, and persuade consumers that Nexium was a new and improved PPI.

"AstraZeneca pulled a massive 'bait and switch' on the American public," said Nan Brasmer, President of the California Alliance for Retired Americans. "Rather than looking for new drugs that would be real improvements for patients, they poured millions of dollars into promoting a drug that was far more expensive but no better than equally effective generic drugs."

The ads claimed that Nexium was proven more effective at acid inhibition than comparable drugs, the suit states. However, the clinical trials alluded to in these ads only compared Nexium at dosage levels twice those of Prilosec (40 mg to 20 mg respectively). No tests were done to compare 40 mg of Nexium to 40 mg of Prilosec.

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