For Immediate Release
Media Contact: Bob Cooper
(208) 334-4112

Date: October 1, 2010

Idaho Recovers Nearly $1 Million in Medicaid Fraud Settlement

(Boise) – Idaho will receive $ $985,105 as part of a $72.5 million settlement with Novartis Pharmaceuticals Corporation and Novartis Vaccines & Diagnostics, Inc., Attorney General Lawrence Wasden said. Wasden’s Medicaid Fraud Control Unit joined with 49 states, the District of Columbia and the federal government in the settlement.

The agreement with Novartis resolves allegations that the company promoted the use of tobramycin, a cystic fibrosis drug, which is marketed under the trade name TOBI®, for uses not approved by the Food & Drug Administration. 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.

The participating states and the federal government alleged that from January 2001 through July 2006, TOBI® was marketed for off-label indications that were not medically accepted indications for which the state Medicaid programs provided coverage. 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 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. Half of Idaho’s share of the settlement will go to the Idaho Department of Health and Welfare, Division of Medicaid, to reimburse the department for improper claims. The other half will go to the state’s general fund and will be available for appropriation by the Idaho Legislature.

A team representing the National Association of Medicaid Fraud Control Units conducted settlement negotiations with Novartis on behalf of the states.

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