Novartis Settles Off-Label Marketing Charges

The Department of Justice (DOJ) just announced that Novartis Pharmaceuticals Corporation has agreed to pay $422.5 million to resolve criminal and civil liability arising from the illegal marketing of <"">Trileptal and five other drugs.

According to the agreement reached with the government, Novartis will plead guilty to a misdemeanor and pay a $185 million combined criminal fine and forfeiture for the off-label promotion of Trileptal that was in violation of the Food, Drug and Cosmetic Act.

The Food and Drug Administration (FDA) approved Trileptal as an anti-epileptic, for the treatment of partial seizures, but not for any psychiatric, pain, or other uses. Once the FDA approves a pharmaceutical, a manufacturer may not market or promote it for any use not specified in its new drug application. The unauthorized uses are also known as “unapproved” or “off-label” uses, said the DOJ.

In addition to the criminal fine and forfeiture, Novartis agreed to pay $237.5 million to resolve civil allegations under the False Claims Act that it unlawfully marketed Trileptal and five other drugs, causing false claims to be submitted to government health care programs. Specifically, the civil settlement resolves allegations that Novartis illegally promoted Trileptal for a variety of uses, including psychiatric and pain uses, which were not medically accepted indications and, therefore, not covered by those programs.

The agreement also resolves allegations that Novartis paid kickbacks to health care professionals to induce them to prescribe Trileptal and five other drugs: Diovan, Zelnorm, Sandostatin, Exforge, and Tekturna. The federal share of the civil settlement is $149,241,306; the state Medicaid share of the civil settlement is $88,258,694.

“This resolution demonstrates the Department of Justice’s ongoing dedication to taking action against pharmaceutical fraud in all its forms,” said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice. “Unlawful off-label promotion and providing illegal inducements to health care professionals undermine the integrity of our health care system and we will continue to pursue these types of violations.”

“Off-label marketing can undermine the doctor-patient relationship and adversely influence the clear judgment that a doctor’s patients have come to rely on and trust,” said Zane D. Memeger, U.S. Attorney for the Eastern District of Pennsylvania. “Pharmaceutical companies have a legal obligation to promote the drugs they manufacture only for uses that the Food and Drug Administration has deemed are safe and effective. That legal obligation takes priority over a company’s bottom line. This prosecution demonstrates our continuing commitment to ensure that pharmaceutical companies comply with the law.”

The civil settlement resolves four lawsuits filed under the qui tam, or whistleblower, provisions of the False Claims Act, which allow private citizens with knowledge of fraud to bring civil actions on behalf of the United States and share in any recovery. As part of the resolution, the whistleblowers, all former employees of Novartis, will receive payments totaling more than $25 million from the federal share of the civil recovery.

Novartis also signed a Corporate Integrity Agreement (CIA) with the Department of Health and Human Services, Office of Inspector General (HHS-OIG). The company is subject to exclusion from Federal health care programs, including Medicare and Medicaid, for a material breach of this CIA and subject to monetary penalties for less significant breaches. Among other things, the CIA requires the board of directors (or a committee of the board) to annually review the company’s compliance program with the help of an outside expert and certify its efficacy; that certain senior executives annually certify that their departments or functional areas are compliant; that Novartis send doctors a letter notifying them about the settlement; and that the company posts, on its website, information about payments to doctors, such as honoraria, travel or lodging. The five-year agreement further requires the implementation of a compliance program addressing promotional activities.

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