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Attorney General's News Release

June 15, 2010

Attorney General Koster announces Missouri reaches settlement with pharmaceutical company -- state to receive $1.7 million --

Jefferson City, Mo. - Attorney General Chris Koster today announced his office has reached a settlement with Novartis Pharmaceuticals Corporation and Novartis Vaccines & Diagnostics, Inc. ("Novartis") resolving allegations that the company promoted the use of tobramycin, a cystic fibrosis drug marketed under the trade name TOBI®, for uses not approved by the Food & Drug Administration.  Missouri will receive $1.7 million as part of the $72.5 million settlement.  The settlement involved 49 states, the District of Columbia, and the federal government.  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.

"Novartis operated outside the law to profit at the expense of Missouri taxpayers and those who need the state's Medicaid services," Koster said.  "This settlement will give other companies pause before using such methods."

Koster said participating states and the federal government alleged that from January 2001 through July 2006 TOBI® was marketed for off- label indications that were not approved by the FDA.  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 the marketing scheme, state Medicaid programs paid for the drug even though Novartis could not clinically prove the effectiveness of TOBI for these off-label uses.

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.

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