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Novartis Pharmaceuticals Settles with DOJ for $420 Million

Novartis Pharmaceuticals, a US subsidiary of a Swiss pharmaceutical group Novartis, settled with the US Department of Justice (DOJ) for $420 million for allegations of the off-label promotion of Trileptal, submitting false claims because of the unlawful marketing, and paying kickbacks to health care professionals inducing them to prescribe Trileptal and five other drugs. The Food and Drug Administration (FDA) approved Trileptal as an anti-epileptic drug, but did not approve it for psychiatric or pain uses. Novartis Pharmaceuticals allegedly marketed Trileptal for unapproved or off-label uses and agreed to plead guilty to a misdemeanor and pay $185 million in fines. Further, Novartis Pharmaceuticals allegedly submitted claims to government healthcare programs as a result of that marketing, in addition to paying kickbacks to healthcare professionals in exchange for prescribing Trileptal and five other drugs–Diovan, Zelnorm, Sandostatin, Exforge, and Tekturna–agreeing to pay $237.5 million in fines. As a result of this settlement, Novartis Pharmaceuticals signed a Corporate Integrity Agreement (CIA) with the Department of Health and Human Services, Office of Inspector General stating it would be “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.” This is yet another reminder that the federal government is cracking down on fraud and abuse violations in all facets of the healthcare industry. Healthcare providers should continue to be aware of the changes in the law and monitor their practices to ensure compliance with all evolving regulations.

For more information, please contact Robert S. Iwrey, Esq., Adrienne Dresevic, Esq., or Carey F. Kalmowitz, Esq. at (248) 996-8510 or (212) 734-0128 or Daniel B. Brown, Esq. at (770) 804-6475 or visit the Healthcare Litigation and Stark and Anti-Kickback specialty pages on the HLP website.

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