Novartis Pharmaceuticals will pay $422.5 million to resolve criminal and civil charges of illegal marketing of certain pharmaceutical products, according to the Department of Justice.
In an agreement with the government, the East Hanover, N.J.-based company will plead guilty to a misdemeanor and pay a $185 million combined criminal fine and forfeiture for the off-label promotion of Trileptal in violation of the Food, Drug and Cosmetic Act.
The Food and Drug Administration has approved Trileptal as an anti-epileptic drug for the treatment of partial seizures, but not for the treatment of psychiatric conditions, pain or other issues. Once a drug is approved by the FDA, a manufacturer may not market or promote it for any use not specified in its new drug application. The unauthorized uses are also known as "unapproved" or "off-label" uses.
In addition to the criminal fine and forfeiture, Novartis will pay $237.5 million to resolve civil allegations under the False Claims Act that the company unlawfully marketed Trileptal and five other drugs, causing false claims to be submitted to government healthcare programs.
Officials say the settlement resolves allegations that the company paid kickbacks to healthcare professionals to prescribe Trileptal, Diovan, Zelnorm, Sandostatin, Exforge and Tekturna. The federal share of the civil settlement is $149,241,306, and the state Medicaid share of the civil settlement is $88,258,694.
"Unlawful off-label promotion and providing illegal inducements to healthcare professionals undermine the integrity of our healthcare system and we will continue to pursue these types of violations," said Tony West, assistant attorney general for the Civil Division of the Department of Justice.
"Off-label marketing can undermine the doctor-patient relationship and adversely influence the clear judgment that a doctor's patients have come to rely on and trust," said Zane D. Memeger, U.S. attorney for the Eastern District of Pennsylvania. "Pharmaceutical companies have a legal obligation to promote the drugs they manufacture only for uses that the Food and Drug Administration has deemed are safe and effective. That legal obligation takes priority over a company's bottom line."
The civil settlement resolves four lawsuits filed under the qui tam, or whistleblower, provisions of the False Claims Act. As part of the settlement, the whistleblowers, all former employees of Novartis, will receive payments totaling more than $25 million from the federal share of the civil recovery.
Novartis also signed a corporate integrity agreement with the Department of Health and Human Services' Office of Inspector General. The company is subject to exclusion from federal healthcare programs, including Medicare and Medicaid, for a material breach of this agreement and subject to monetary penalties for less significant breaches.