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Novartis Settles Off-Label Drug Marketing and Kickback Violations

The Department of Justice ("DOJ") has announced that a two-pronged federal investigation against Novartis Pharmaceuticals Corporation focusing on the company's unlawful off-label marketing activities and bribery of medical professionals in connection with the anti-seizure drug Trileptal settled on September 30. Novartis agreed to pay $422.5 million to resolve the civil liability charges and the criminal charges brought against it under the whistleblower provisions of the False Claims Act.

The federal charges concerned the company's marketing materials promoting the product for the treatment of bipolar disease and neuropathic pain, uses not approved by the FDA, which thus far has confined the company to marketing Trileptal as an anticonvulsant drug to treat seizures. Although doctors can freely prescribe a drug for any condition - and doctors sometimes do prescribe Trileptal for psychiatric conditions - a drug company cannot market a medication for a particular use unless it has first received federal approval to do so. The government fined Novartis $185 million for its off-label activities.

The DOJ also fined the company $237.5 million for paying illegal kickbacks to health care professionals to influence them to prescribe Trileptal and other drugs for off-label uses. The government claims that the company made hundreds of millions of dollars through bribery and other inducements.

The kickback charges were brought pursuant to the qui tam (whistleblower) provisions of the False Claims Act. Four separate civil lawsuits were brought against the company by former employees, who collectively received $25.6 million of the settlement amount. Whistleblower actions are cases that are initially brought to the attention of the government by private individuals, such as employees with inside knowledge of illegal company activity. If the government decides to act upon the information and successfully prosecutes a case, those persons share in any monetary recovery.

Related Resource: "Novartis Settles Marketing Lawsuit Over Trileptal, Other Drugs" October 4, 2010

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