Novartis Agrees To Pay Over $72 Million To Settle False Claims Act Lawsuit Regarding Off-Label Marketing

On May 4, 2010, the U.S. Department of Justice announced that it had reached a settlement agreement with the drug company Novartis Vaccines & Diagnostics, Inc. (“Novartis”) in which the company will pay $72.5 million to resolve allegations that it submitted false claims for payment to the Government in connection with its cystic fibrosis drug TOBI.  TOBI is an inhaled antibiotic that was approved by the Food and Drug Administration (“FDA”) for the treatment of certain cystic fibrosis patients.  According to the lawsuit, Novartis marketed TOBI for uses that were not approved by the FDA, such as diseases besides cystic fibrosis and for cystic fibrosis patients that did not satisfy the parameters of the FDA-approved indication.

The qui tam lawsuit was brought on behalf of the Government by three whistleblowers who were former employees of Novartis’s predecessor, Chiron Corporation.  The whistleblowers will receive a $7.825 million share of the settlement as a reward for reporting the company’s misconduct.

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