Novartis settles False Claims Act allegations with US for $72.5 million

by Ben Vernia | May 5th, 2010

On May 4, the Department of Justice announced that Novartis Vaccines & Diagnostics will pay $72.5 million to settle False Claims Act claims for the off-label promotion of one of its drugs. According to DOJ’s press release:

Novartis Vaccines & Diagnostics Inc. and Novartis Pharmaceuticals Corporation have agreed to pay $72.5 million to resolve civil False Claims Act allegations arising from the marketing of the cystic fibrosis drug TOBI, the Justice Department announced today. The settlement resolves allegations that, between Jan. 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.

The Food and Drug Administration (FDA) approved TOBI, an inhaled antibiotic, for the treatment of certain cystic fibrosis patients. The United States alleges that Chiron, and then Novartis, marketed TOBI for unapproved uses, such as diseases other than cystic fibrosis, and for cystic fibrosis patients who did not meet the parameters of the FDA-approved indication and for which TOBI was not a medically accepted use. The government alleges that this conduct caused the submission of false claims to federal health care programs.

The case was brought as a qui tam suit by three former Chiron employees, who will share $7.825 million, or approximately 18% of the $43.5 million federal share of the recovery. DOJ’s press release included an acknowledgement of the role of the Defense Criminal Investigate Service (DCIS) in the case.

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