Press Release from Tennessee Attorney General Bob Cooper, Oct. 12, 2010:
Major Drug Manufacturer Novartis to Pay $422.5 Million to Settle Claims of Off-label Marketing and Kickbacks
Tennessee Attorney General Bob Cooper announced today that Tennessee will participate in a joint settlement with other states and the federal government in a $237.5 million agreement with a major drug manufacturer resolving improper drug marketing and kickback allegations.
The agreement with New Jersey-headquartered Novartis Pharmaceuticals Corporation (Novartis) settles allegations it improperly promoted Trileptal and engaged in unlawful kickback schemes to induce physicians to prescribe Trileptal, Diovan, Zelnorm, Sandostatin, Exforge and Tekturna. As a result, Novartis will pay the states and the federal government $237.5 million in damages and penalties for losses to the Medicaid and other federal health care programs. Tennessee officials noted that from 2000 to 2007 TennCare paid $50,519,170 for Tripeltal. Of that, $37,478,244 was for off-label diagnoses. Tennessee’s share of the joint agreement payment is $4,123,148 plus interest.
Trileptal is an anti-epileptic drug approved by the Food and Drug Administration (FDA) for the treatment of partial seizures in patients who have epilepsy. The civil settlement resolves claims that from Jan. 1, 2001 through June 30, 2005 Novartis promoted the sale and use of Trileptal for certain uses not approved by the FDA. The settlement resolves a government investigation into allegations Novartis used improper incentives to encourage psychiatrists and other health care professionals to prescribe Trileptal for unapproved uses such as the treatment of bipolar disorder and neuropathic pain.
Novartis is also alleged to have provided illegal remuneration such as payments for speaker programs, advisory boards and gifts including entertainment, travel and meals to health care professionals to induce them to promote and prescribe the drugs Diovan, Zelnorm, Sandostatin, Exforge, and Tekturna.
“Health care choices shouldn’t be influenced by vacations, gifts and kickbacks like those alleged in this case,” Attorney General Bob Cooper said. “We applaud the actions of all the states and federal government officials who participated in this collaborative effort that will help offset the harm caused by these unfair marketing actions.”
The Director of the Tennessee Bureau of Investigation, which houses the state’s Medicaid Fraud Control Unit, Mark Gwyn said of the agreement, “I commend those private individuals who came forward to expose those improperly promoting drugs to reap a financial reward. A price tag can’t be put on someone who suffered harm, but this penalty will hopefully make companies rethink their marketing practices.”
As one of the conditions of the settlement, Novartis will enter into a Corporate Integrity Agreement with the Office of the Inspector General of the United States Department of Health and Human Services (“HHS-OIG”), which will closely monitor Novartis’ practices going forward.
These agreements are based upon four separate whistleblower lawsuits filed by private individuals; three of which were consolidated in the United States District Court for the Eastern District of Pennsylvania and one of which was filed in the Middle District of Florida under state and federal false claims statutes. A team formed by the National Association of Medicaid Fraud Control Units participated in the investigation and represented the interests of the states during negotiations with Novartis.