updated 4/27/2010 2:11:19 PM ET 2010-04-27T18:11:19

The federal government on Tuesday reached a $520 million settlement with pharmaceutical manufacturer AstraZeneca, resolving allegations surrounding the company's promotion of off-label uses for the antipsychotic drug Seroquel.

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The case involves AstraZeneca promoting Seroquel for uses that are not approved by federal drug regulators, including insomnia and psychiatric conditions besides schizophrenia and bipolar disorder.

U.S. Attorney Michael Levy of Philadelphia, where the settlement was filed, said that the company had "turned patients into guinea pigs in an unsupervised drug test."

Partly because of all the off-label use of Seroquel, the drug brought in $4.9 billion to AstraZeneca in 2009, making it the company's second-best seller.

The U.S. Food and Drug Administration approves drugs for specific uses, but doctors are free to prescribe as they see fit. Such off-label use is a gray area and a long-running controversy when it comes to drug regulation.

Drug companies are supposed to market medications only for uses that the FDA has approved. But salespeople can find lots of ways to get around the restriction. For example, they can let doctors know about research indicating that a given drug shows promise to treat a condition that the FDA hasn't yet cleared it for.

Doctors are eager to get the latest treatments for their patients, especially if other physicians are also prescribing the medication.

Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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