AUSTIN, Texas (Legal Newsline) - Texas Attorney General Greg Abbott announced a settlement Tuesday with the Swiss-based pharmaceutical company Novartis to resolve a civil fraud enforcement action that alleged unlawful and deceptive marketing.
Novartis allegedly unlawfully marketed Elidel, an eczema drug, to treat infant children and failed to disclose the known harmful side effects of the drug, including cancer-related risks.
Under the terms of the agreement, Novartis will pay $19.9 million in total to resolve the allegations by the state of Texas and the federal government of off-label marketing. Texas will receive $6,638,250 of the settlement.
Abbott's office alleged that Novartis improperly urged doctors to prescribe Elidel to children under the age of two for purposes that were not approved by the U.S. Food and Drug Administration. Because of the alleged misrepresentations, Texas' Medicaid program paid too much for Elidel prescriptions.
Medicaid is jointly funded by the state and the federal government, entitling both Texas and the federal government to shares of the $19.9 million monetary settlement. The relator-whistleblower who uncovered the allegedly unlawful conduct of Novartis and reported it to authorities will also receive a share of the total settlement.
The relator-whistleblower and Abbott's office will also recover legal costs connected with the enforcement action.