Consumers of the heartburn medication Nexium(R) today filed a lawsuit against the drug’s distributor, AstraZeneca . The suit alleges that the pharmaceutical company sought to preserve their market share and profits as the patent on their blockbuster drug, Prilosec(R), 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.

“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 American Federation of Labor - Congress of Industrial Organizations (AFL-CIO), the Congress of California Seniors, and the California Alliance for Retired Americans, 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.

The AFL-CIO, a federation of labor unions representing 13 million members (more than 80 percent of the unionized workforce in the United States), sees the suit as apart of its mission to make healthcare affordable for all Americans.

“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.” The AFL-CIO is the 100th organization to join the PAL coalition, which spans 34 states and the District of Columbia.

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.

“Our case will show that AstraZeneca needed to manipulate consumers into believing that Nexium was better than Prilosec, so they loaded the dice to validate their claims,” said Steve Berman. “The evidence will show that the drug company knew that comparing the two drugs at equal dosages would show that Nexium did not work better than Prilosec, so they conveniently left that information out.”

As detailed in the complaint, Nexium is a “mirror compound” of Prilosec, containing the same active molecule found in Prilosec.

According to Alex Sugerman-Brozan, director of PAL, AstraZeneca’s Nexium campaign is a classic example of a ‘me-too’ drug being falsely marketed as a medical improvement. “AstraZeneca took the active isomer in Prilosec, patented that, renamed it Nexium, and worked to move its customers from Prilosec to Nexium before Prilosec’s patent expired. But the main innovation was that they put yellow stripes on their purple pill, and charged consumers grossly inflated prices.”

“What AstraZeneca did with Nexium is symptomatic of the drug industry in the United States today,” said Gary Passmore, a spokesman for the Congress of California Seniors. “They are more concerned with profits than with health. But the public is waking up, and we will fight to hold drug companies accountable when they illegally deceive consumers.”

According to the complaint, AstraZeneca’s plan proved profitable. Information shows that sales of Prilosec plummeted in response to generic competition and price deflation, while sales of Nexium rose to $3.3 billion by 2003. Currently, Prilosec can be obtained over the counter and costs about one-eighth of the cost of Nexium.

“We believe AstraZeneca is taking advantage of consumers by manipulating their most basic need for health and wellness. Despite the fact that there are highly effective, affordable drugs on the market to treat heartburn, Nexium continues to be a moneymaker for AstraZeneca, because of the deception they employed to create this demand,” said Berman.

The lawsuit claims that AstraZeneca is violating California’s Unfair Competition Law and False Advertising Law by engaging in deceptive and unfair practices in the marketing and promotion of Nexium.

About Hagens Berman

Hagens Berman is a law firm with offices in Seattle, Boston, Los Angeles, and Phoenix. The firm has developed a nationally recognized practice in class action litigation. The firm is co-lead counsel in litigation to recover losses from Enron employees’ retirement funds and represented Washington and 12 other states in lawsuits against the tobacco industry that resulted in the largest settlement in the history of litigation. The firm also served as counsel in several other high-profile cases including the Washington Public Power Supply litigation, which resulted in a settlement of more than $850 million, and the $92.5 million settlement of The Boeing Company litigation. Other notable cases include litigation involving the Exxon Valdez oil spill; Louisiana Pacific Siding; Morrison Knudsen; Piper Jaffrey; Nordstrom; Boston Chicken; and Noah’s Bagels.

About Prescription Access Litigation Project

Prescription Access Litigation Project (PAL) (http://www.prescriptionaccess.org/) is a project of Boston-based Community Catalyst. PAL is a nationwide coalition of 100 state, local, and national senior, labor and consumer health advocacy groups in 35 states fighting to make prescription drugs affordable. Since its launch in 2001, PAL has filed 20 sets of lawsuits targeting drug industry practices that illegally push the price of prescription drugs beyond the reach of the American consumer.

About the American Federation of Labor & Congress of Industrial Organizations

The American Federation of Labor & Congress of Industrial Organizations (AFL-CIO) (http://www.aflcio.org/) is the largest organization of working men and women in the United States. The AFL-CIO works for social and economic justice through its 60 affiliated national and international unions which total 13.5 million members.

About the Congress of California Seniors

The Congress of California Seniors (CCS) (http://www.seniors.org/) established in 1977, is a statewide nonprofit education and advocacy organization dedicated to improving the life of seniors and their families. Through its educational program and legislative action, CCS has emerged as a major progressive force for California’s seniors. The organization devotes its efforts to legislative and consumer affairs that deal primarily with issues concerning older adults.

About the California Alliance for Retired Americans

The California Alliance for Retired Americans (CARA) is a consumer advocacy group that unites retired workers and community groups to win social and economic justice, full civil rights, and a better, more secure life for themselves, their families and future generations. CARA’s issue priorities include advocating for cheaper prescription drugs.