Novartis to pay $72.5 million in US false claim settlement on off-label use of Tobi
This article was originally published in Scrip
Novartis has agreed to pay $72.5 million to settle allegations that it submitted false claims to federal healthcare programmes for off-label uses of its cystic fibrosis drug Tobi (tobramycin solution for inhalation), the US Justice Department said.
Novartis gained the Tobi product through its 2006 acquisition of Chiron. Tobi was launched in the US, its first market, in 1998.
The department said that the settlement resolves allegations that, from January 2001 to April 2006, Chiron and, from April 2006 to July 2006, Novartis knowingly promoted the sale of the product for uses not approved by the FDA. According to the settlement agreement, the government alleged that the off-label uses were "for diseases other than cystic fibrosis, for cystic fibrosis patients under the age of six, and for cystic fibrosis patients whose forced expiratory volume measurement at one second (FEV1) was over 75%". The government further alleged that these off-label unapproved uses "were not medically accepted indications for which the Medicaid programme provided coverage".
The government said promotion of these off-label uses resulted in Chiron and Novartis knowingly causing false claims to be submitted to Medicaid and other government healthcare programmes, a violation of the US False Claims Act. Novartis' settlement payment will be divided among the US government, which will receive $43.5 million, and various states. The settlement resolves a lawsuit brought by three Chiron whistleblowers, who will receive $7.8 million of the federal share. The lawsuit was unsealed at the time that the settlement was announced.
The settlement agreement said that around 20 April 2006, a Novartis affiliate merged with Chiron, forming a new company known as Novartis Vaccines & Diagnostics. Before the merger, Chiron manufactured, distributed, marketed and sold Tobi. After the merger, Novartis Pharmaceuticals Corp assumed responsibility for marketing, promotion and sale of Tobi in the US.
The FDA-approved data sheet for Tobi states that the product is indicated for the management of cystic fibrosis patients with Pseudomonas aeruginosa, and that the safety and efficacy have not been demonstrated in patients under the age of six years, patients with FEV1 under 25% or greater than 75% predicted, or patients colonised with Burknolderia cepacia.
The settlement agreement states, "Novartis denies the contentions of the United States as set forth herein and the relators as set forth in the civil action, and further denies any liability or wrongdoing related to those contentions." It further noted that the parties entered into the final settlement to avoid the delay, expense and uncertainty of protracted litigation.
Earlier this year, Novartis said it had entered into a plea agreement with the US Attorney's Office for the Eastern District of Pennsylvania to settle a probe of the company's off-label marketing and promotion of Trileptal (oxcarbazepine) and several other medicines (scripnews.com, 27 January 2010).