Corporate Compliance

Novartis Pharmaceuticals pays $422.5M to resolve False Claims and kickback allegations

Compliance Monitor, October 6, 2010

New Jersey-based Novartis Pharmaceuticals Corporation will pay $422.5 million to resolve criminal and civil liabilities for illegally marketing the anti-epileptic drug Trileptal and five other drugs, according to a Department of Justice (DOJ) press release.

Novartis will pay $185 million in criminal fines and forfeiture for illegally promoting Trileptal, an FDA approved anti-epileptic drug, as a remedy for psychiatric, pain, and other ailments. Novartis agreed to pay $237.5 million to resolve civil allegations under the False Claims Act for unlawfully marketing FDA unapproved drugs. Novartis also paid kickbacks to healthcare professionals to prescribe Trileptal and the other drugs, Diovan, Zelnorm, Sandostatin, Exforge, and Tekturna, according to the DOJ.

In addition to the fines, Novartis signed a five-year corporate integrity agreement (CIA) with the Department of Health and Human Services, Office of Inspector General (HHS-OIG). The CIA requires Novartis to:

  • Annually review their compliance program with help from an outside expert
  • Ensure specific senior executives annually certify their departments are compliant
  • Send physicians a letter notifying them about the settlement
  • Post on its website information about honoraria, travel, or lodging payments to doctors

Novartis employees filed four lawsuits under the qui tam provisions of the False Claims Act. The whistleblowers will collectively receive payments of more than $25 million of the recovery.

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