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Novartis to Pay $19.9 Million to Settle False Claims Charge

Novartis will pay Texas $19.9 million to settle allegations that it violated the False Claims Act.  The lawsuit was originally filed by Donald Galmines in federal court in Pennsylvania. Galmines is a former Novartis marketing representative.

The lawsuit claimed that Novartis engaged in“off-label marketing” by requiring its sales representatives to induce doctors to prescribe Elidel for uses not approved – and specifically rejected – by the FDA.  The primary off-label use at issue was for treatment of eczema in children younger than two years of age, a use which Elidel was not FDA approved nor shown to be safe and effective.

In 2005, the FDA required Novartis to put a “Black Box Warning” on Elidel packaging, warning physicians and consumers that certain cancers in infants were associated with the use of Elidel.

Galmines alleged that Novartis required its sales representatives to market Elidel for numerous conditions other than eczema, and that it paid physicians kickbacks to encourage them to do so.

The U.S. Department of Justice elected not to intervene in the Pennsylvania complaint filed by Galmines.  Galmines decided to proceed with that case on behalf of the United States and several states, including California, Massachusetts, Virginia, Illinois, and Michigan.  Galmines’s complaint initially included claims on behalf of the State of Texas.  Those claims were voluntarily dismissed, and subsequent events led to the Texas settlement.

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