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Accused of Kickbacks, Novartis Agrees to $422.5 Million Settlement

Swiss pharmaceutical giant Novartis will pay $422.5 million to settle federal criminal and civil charges over its marketing practices, including allegations that the company made illegal kickbacks to doctors to prescribe drugs for unapproved uses. Federal prosecutors accused Novartis of paying for doctors’ entertainment, travel and meals, as well as funneling kickbacks through speaker programs, The New York Times reports.

Part of the settlement involves pleading guilty to one charge of mislabeling and agreeing to pay a criminal fine and forfeiture totaling $185 million, according to an announcement from the U.S. attorney in Philadelphia. In addition, the company will pay $237.5 million to resolve civil claims involving kickbacks and off-label marketing, or promoting drugs for purposes not approved by the Food and Drug Administration.

The six drugs involved in the case are Trileptal, an anti-seizure medicine; Diovan, a hypertension drug and the company’s top-selling product, with $6 billion in sales last year, according to the Times; Exforge, which also treats hypertension; Sandostatin,¬†which treats a growth hormone disorder; Tekturna, a blood pressure medicine; and Zelnorm, a drug for irritable bowel syndrome and constipation, but which was taken off the U.S. market in 2007 because of concerns that it raised the risk of heart problems.

Aside from the mislabeling charge, the company denies any wrongdoing.

In a statement, the company said it “cooperated fully with the government” throughout the investigations. In addition, one paragraph after it indicated it will plead guilty to the mislabeling charge, the company said it “will continue its commitment to high standards of ethical business conduct and regulatory compliance.”

Novartis joins a growing list of pharmaceutical firms that have paid large sums to settle health care fraud and off-label marketing cases in recent years. The group includes Pfizer, which paid $2.3 billion; Eli Lilly, $1.4 billion; and Forest, which agreed last month to pay $313 million.

As part of the Novartis settlement, the company signed a five-year corporate integrity agreement with the Department of Health and Human Services, which requires the company to step up monitoring and reporting of its sales practices. Four whistleblowers in the case will share more than $25 million in settlement money, the Times reports.

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