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Attorney General's News Release

September 30, 2010

Attorney General Koster announces Missouri recovers $5.5 million in pharmaceutical company settlement -- Novartis to pay $422.5 million to states and federal government --

Jefferson City, Mo. - Attorney General Chris Koster announced today that Novartis Pharmaceuticals Corporation will repay the Missouri Medicaid program $5.5 million as part of a national settlement after the company was accused of engaging in illegal kickbacks and improper sales and marketing practices. The allegations involve the Novartis drugs Trileptal, Diovan, Zelnorm, Sandostatin, Tekturna, and Exforge.

Koster said Novartis will pay the states and the federal government a total of $237.5 million in damages and penalties to compensate Medicaid and various federal healthcare programs for harm suffered as a result of this conduct. The company also will pay the federal government $185 million criminal penalty after pleading guilty to a misdemeanor charge of misbranding.

"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 returns a significant amount of money to the taxpayers' coffers and will give other companies pause before using such methods."

Koster said participating states and the federal government alleged that from January 2001 through June 2005 Trileptal, an anti-epileptic drug, was marketed for off-label indications that were not approved by the FDA, such as treatment for bipolar disorder and neuropathic pain. As a result of the marketing scheme, state Medicaid programs paid for the drug even though Novartis could not clinically prove its effectiveness for these off-label uses. In addition, allegations were made that Novartis paid health care professionals through speaker programs, advisory boards, and gifts-including entertainment, travel, and meals-to induce them to prescribe or recommend Trileptal, Diovan, Zelnorm, Sandostatin, Tekturna, and Exforge.


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