AstraZeneca under investigation in US over marketing of Nexium

AstraZeneca, the UK's second-biggest drug maker, is being investigated in the US over allegations of anti-competitive behaviour.

The US Federal Trade Commission (FTC), which enforces antitrust laws, is investigating the company's marketing and advertising of a new ulcer drug, Nexium.

AstraZeneca revealed in its annual report, published yesterday, that the company has recently received a "civil investigative demand" from the FTC requesting information. The company is co-operating with the inquiry, the report said. The company and the FTC refused to comment further.

Analysts were yesterday speculating that the pricing of the drug will be the focus of the FTC's investigation. AstraZeneca offered big discounts on Nexium in its desperate attempt to attract patients previously using its older drug, Losec.

Losec, which had sales of £10m a day at its peak, lost patent protection in October 2001 and the company faced a race against time to switch users to a new product before cheap copycat versions of Losec flooded the market. These were finally launched last Christmas.

Analysts believe rivals could have asked the FTC to investigate if Nexium's cut-price launch constituted predatory pricing.

The switch to Nexium proved highly successful, with sales reaching nearly $2bn (£1.3bn) in 2002. Its market share topped 20 per cent in December.

The annual report yesterday also revealed the salary and bonus details for Sir Tom McKillop, the chief executive. His total package rose 15 per cent to £1.4m in 2002.

On top of a basic salary of £809,000, Sir Tom netted bonuses worth £517,000, a 38 per cent increase on 2001, although the share price fell 28 per cent over the year as a number of other new product launches were delayed or proved disappointing. The bonus is based on the performance of AstraZeneca's earnings per share.