Novartis Vaccines & Diagnostics to Pay More Than $72 Million to Resolve False Claims Act Allegations Concerning TOBI

WASHINGTONNovartis Vaccines & Diagnostics Inc. and Novartis Pharmaceuticals Corporation have agreed to pay $72.5 million to resolve civil False Claims Act allegations arising from the marketing of the cystic fibrosis drug TOBI. The settlement resolves allegations that between Jan. 1, 2001 and July 31, 2006, Novartis and its predecessor, Chiron Corporation, caused false claims to be submitted to federal health care programs for certain off-label uses of the drug. The Food and Drug Administration (FDA) approved TOBI, an inhaled antibiotic, for the treatment of certain cystic fibrosis patients. The United States alleges that Chiron, and then Novartis, marketed TOBI for unapproved uses, such as diseases other than cystic fibrosis, and for cystic fibrosis patients who did not meet the parameters of the FDA-approved indication and for which TOBI was not a medically accepted use. The government alleges that this conduct caused the submission of false claims to federal health care programs. Under the agreement, the proceeds from the settlement will be divided between the federal government and various states, with the United States receiving $43.5 million to resolve the federal claims, and the states receiving $29 million to settle their respective claims. This settlement resolves a lawsuit brought by three former Chiron employeesRobert Lalley, Courtney Davis, and William Manosunder the qui tam, or whistleblower, provisions of the False Claims Act, which permit private individuals known as relators to bring a lawsuit on behalf of the United States and to share in any recovery. The relators will receive $7.825 million of the federal share of the settlement. This settlement is part of the governments emphasis on combating health care fraud. One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover approximately $2.3 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Departments total recoveries in False Claims Act cases since January 2009 have topped $3 billion. The settlement was the result of a coordinated effort among the Commercial Litigation Branch of the Justice Departments Civil Division; the U.S. Attorneys Office for the Northern District of California; the U.S. Department of Health and Human Services, Office of Inspector General; the Office of Personnel Management, Office of Inspector General, the Department of Veterans Affairs, Office of Inspector General; the Defense Criminal Investigative Service; the Federal Bureau of Investigation; the FDA; and the National Association of Medicaid Fraud Control Units.