Novartis to pay $422.5M in off-label marketing case

Novartis has agreed to pay $422.5 million to resolve an investigation in to alleged off-label promotion of Trileptal, as well as civil allegations relating to five other products: Diovan, Exforge, Sandostatin, Tekturna and Zelnorm.

Novartis Pharmaceuticals Corporation, a U.S. unit of the Swiss giant, allegedly created marketing materials promoting Trileptal for off-label uses, including neuropathic pain and bipolar disease. NPC agreed to plead guilty to misdemeanor misbranding of Trileptal through its illegal promotion between July 2000 and December 2001, according to court documents. The company will pay $185,000,000 ($170,000,000 as the criminal fine, plus $15,000,000 as the criminal forfeiture).

NPC also resolved civil allegations under the False Claims Act related to all six drugs and agreed to pay $237.5 million for off-label marketing and offering financial inducements for doctors to prescribe the drugs, according to whistleblowers. These inducements included payments for speaker programs, advisory board memberships, entertainment, travel, and meals to encourage doctors to prescribe the drugs, according to the Philadelphia Inquirer.

According to the complaint, Novartis allegedly implemented an aggressive recruitment effort, designed to train up to 4,000 physician-speakers from across the country, say lawyers at Nolan & Auerbach, which represented the whistleblowers in a release. Instead of recruiting speakers based on their experience or credentials, Novartis targeted physicians based on their potential prescription-writing volume. "As long as they had a prescription pad and were willing to prescribe our products, they qualified as Novartis speakers," says whistleblower Jeremy Garrity. "The company's illegal business practices were snowballing and nobody was stepping up to stop them. I had to do something."

The company will be entering into a corporate integrity agreement with the Office of the Inspector General of the Department of Health and Human Services. NPC will implement for five years additional compliance-related measures, which include additional monitoring, auditing, training, education, reporting and disclosures.

As the New York Times notes, Novartis isn't alone in settling government investigations into healthcare fraud in the last few years. It joins Pfizer, which paid $2.3 billion; Eli Lilly, $1.4 billion; Allergan, $600 million; AstraZeneca, $520 million; Bristol-Myers Squibb, $515 million; and Forest Laboratories, $313 million. Pfizer, Lilly, Allergan and Forest pleaded guilty to crimes in the cases.

- read the Novartis release 
- see U.S. Attorney's Office release
- get the release from Nolan & Auerbach
- check out the Philadelphia Inquirer story
- read the New York Times article
- see the news from MarketWatch

ALSO: Novartis' $422 million settlement contains some hidden gems about how the company promoted Diovan, a blood-pressure drug: Sales reps paid thousands of dollars in speaking fees to doctors who couldn't speak English, and sometimes speakers would address an audience that consisted of just one other doctor, according to a whistleblower suit. Article

Read more on