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Attorney General Van Hollen Announces Settlement With Novartis


MADISON - Attorney General J.B. Van Hollen today announced that Wisconsin will receive $264,337.70, and the federal government $395,038.77 attributable to Wisconsin Medicaid, as part of a $72.5 million settlement with Novartis Pharmaceuticals Corporation and Novartis Vaccines & Diagnostics, Inc. ("Novartis"). The agreement by 49 states, the District of Columbia and the federal government with Novartis resolves allegations that the company promoted the use of tobramycin, a cystic fibrosis drug which is marketed under the trade name TOBI, for uses not approved by the Food & Drug Administration.  The settlement also resolves claims brought by three former employees of Chiron Corporation, the company that manufactured and marketed TOBI before it was acquired by Novartis in 2006.


"Medicaid is a medical assistance program for our neediest citizens jointly funded by the state and federal governments," explained Van Hollen.  "Every dollar that is fraudulently taken from the program is money that can't be used to provide for those who need it most.  My office won't tolerate that, and this settlement is another significant recovery for both taxpayers and those who rely on Medicaid."  


The participating states and the federal government alleged that from January 2001 through July 2006 TOBI was marketed for off- label indications that were not medically accepted indications for which the state Medicaid Programs provided coverage. The off- label marketing included promoting the drug for diseases other than cystic fibrosis and for use in cystic fibrosis patients under the age of six.


As a result of this settlement, Novartis will pay damages equal to double the amount the state expended for prescriptions written as a result the company's off- label marketing.


A team representing the National Association of Medicaid Fraud Control Units conducted settlement negotiations with Novartis on behalf of the states.