Novartis to Pay $422.5M to Settle Off-label Drug Marketing Charges

Novartis Pharmaceuticals Corp. will plead guilty and pay criminal and civil fines totaling $422.5 million to resolve whistleblower claims that it used off-label marketing and paid kickbacks to doctors to illegally promote the antiepileptic Trileptal and five other drugs, federal prosecutors said Thursday.

The Food and Drug Administration approved Trileptal for the treatment of epilepsy, but federal prosecutors said Novartis created marketing materials promoting the drug for off-label uses, including neuropathic pain and bipolar disease, which were not FDA-approved. Novartis allegedly targeted psychiatrists and pain specialists, who used anti-epileptic drugs like Trileptal off-label. The other drugs that were allegedly illegally promoted were Diovan, Exforge, Tekturna, Zelnorm, and Sandostatin.

Prosecutors allege that Novartis marketed and promoted Trileptal as a treatment for bipolar disease and neuropathic pain and told its sales representatives to visit doctors who would not normally prescribe Trileptal due to the nature of their practices. Novartis also allegedly funded continuing medical education programs that used medical professionals to promote off-label uses of Trileptal.

Prosecutors said Novartis made hundreds of millions of dollars in profits from the misbranding and off-label promotions. The criminal fines and forfeitures total about $185 million.

"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 David Memeger, U.S. Attorney for the Eastern District of Pennsylvania, which led the federal probe.

"Pharmaceutical companies have a legal obligation to promote the drugs they manufacture only for uses that the FDA has deemed are safe and effective. That legal obligation takes priority over a company's bottom line."

In the civil agreement, Novartis will pay the federal government and participating states $237.5 million, plus interest, to settle invalid claims for payment for Trileptal and the other drugs that were submitted to Medicare, Medicaid, and other government-sponsored healthcare programs. State Medicaid programs will share $88.2 million of the settlement.

Novartis President for North America Andy Wyss said the U.S. subsidiary of Switzerland's Novartis International AG was "pleased" with the resolution. "(Novartis) will continue its commitment to high standards of ethical business conduct and regulatory compliance in the sale and marketing of our products," Wyss said. "Our goal is to ensure that patients receive the medicines they need and we will continue to work with the government and other organizations to improve healthcare for all Americans."

The civil cases were filed by former Novartis employees who will split $25.6 million from the settlement, under federal whistleblower statutes. Novartis also entered into a five-year corporate integrity agreement with Health and Human Services' Office of Inspector General.