Novartis agrees to $72.5 million settlement

Swiss drugmaker Novartis agreed to pay $72.5 million to settle allegations of off-label marketing of a cystic fibrosis drug, the U.S. Justice Department announced.

In the agreement Novartis denies the government’s contentions and any wrongdoing or liability related to the allegations, which involve an inhaled version of the antibiotic tobramycin branded TOBI, approved by the Food and Drug Administration for certain patients with cystic fibrosis. Novartis could not be reached for comment at deadline.

The settlement resolves a whistle-blower lawsuit filed in 2006 in San Francisco by three former employees of Chiron, a company Novartis acquired in 2006 for $5.4 billion. Chiron allegedly promoted TOBI for unapproved uses beginning in 2001, and Novartis allegedly continued the practice for three months following the acquisition.

According to the lawsuit, the alleged off-label marketing resulted in false claims to Medicaid, TRICARE, U.S. Veterans Affairs Department and the Federal Employee Health Benefits Program. Several states are set to divvy up $29 million from the settlement payment, and the whistle-blowers are in line to share $7.8 million of the federal government’s $43.5 million.