Novartis Settles Off-Label Marketing Case

Novartis Vaccines & Diagnostics Inc. and Novartis Pharmaceuticals Corporation have agreed to a $72.5 million payout to settle civil False Claims Act allegations originating with the marketing of <"">cystic fibrosis drug TOBI, said the Justice Department. The settlement resolves allegations that, between January 1, 2001 and July 31, 2006, Novartis and its predecessor, Chiron Corporation, caused false claims to be submitted to federal health care programs for certain off-label uses of the drug, said PR NewsWire.

TOBI is an inhaled antibiotic approved by the U.S. Food and Drug Administration (FDA) for use in certain cystic fibrosis patients. The United States alleges that Chiron, and later, Novartis, marketed TOBI for unapproved, or off label, uses for diseases other than cystic fibrosis, as well as for cystic fibrosis patients not meeting criteria for the FDA-approved indication, and for uses for which TOBI was not a medically accepted. According to the government, it alleges these actions resulted in false claims to federal health care programs, explained PR NewsWire.

“Pharmaceutical companies must not promote their drugs for uses that have not been proven to be safe and effective,” said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice. “We are committed to pursuing False Claims Act violations and recovering taxpayer dollars lost to off-label marketing,” West added.

“This office is committed to safeguarding the federal health care programs against false claims caused by off-label marketing and other types of illegal conduct,” said Joseph Russoniello, U.S. Attorney for the Northern District of California.

This settlement resolves a lawsuit brought by three former Chiron employees—Robert Lalley, Courtney Davis, and William Manos—under the qui tam (whistleblower) provisions of the False Claims Act, said PR NewsWire. This provision permits private individuals, known as relators, to bring a lawsuit on behalf of the United States and to share in any recovery received. In this case, the relators will receive $7.825 million of the federal share, reported PR NewsWire. Also, under the agreement, settlement proceeds will be split between the federal government and various states; the United States will receive $43.5 million to resolve the federal claims, and the states will receive $29 million to settle their respective claims.

“The Defense Criminal Investigative Service (DCIS) is thoroughly committed to pursue any and all allegations of fraud that drain precious resources from America’s war fighters,” said Richard W. Gwin, Special Agent in Charge of the DCIS Western Field Office. “This particular fraud was directly related to the healthcare of our brave soldiers, sailors, airmen, marines, and their families throughout the world,” said Gwin.

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