Oregon was on the team that negotiated a $72.5 million settlement with drug-maker Novartis over its marketing of a cystic fibrosis drug.

Attorney General John Kroger announced today that the Oregon Health Plan will receive more than $220,000 as part of a global settlement with Novartis over charges that it illegally marketed tobramycin, a cystic fibrosis drug.

“Pharmaceutical companies that market drugs for unapproved uses and take money away from Medicaid need to be held accountable,” said Attorney General Kroger.

The settlement will provide a total of $72.5 million to the states and the federal government. Novartis Pharmaceuticals Corp. and Novartis Vaccines & Diagnostics, Inc. were accused of promoting the use of tobramycin, a cystic fibrosis drug that is marketed under the trade name TOBI®, for uses not approved by the Food & Drug Administration.

The Oregon Department of Justice Medicaid Fraud Unit was one of the four team members that represented the National Association of Medicaid Fraud Control Units in conducting settlement negotiations with Novartis on behalf of the states.

The participating states and the federal government alleged that from January 2001 through July 2006 Novartis marketed TOBI® for uses not covered by the Oregon Health Plan and other state a federal Medicaid programs. The company was accused of marketing the drug for treating diseases other than cystic fibrosis and for use in cystic fibrosis patients under the age of six.

The damages under the settlement represent twice the amount that the illegal marketing cost the Medicaid program.

In addition to recovering money for the Oregon Health Plan, the Medicaid Fraud Unit investigates and prosecutes billing fraud, physical and financial abuse in Medicaid-funded facilities and fraud committed by Medicaid program employees.

Oregon is a national leader in the fight against health care fraud. In 2009, the Department of Justice secured more than $20 million in health care fraud settlements to reimburse the Oregon Health Plan, enhance state consumer protection efforts and help balance the state budget.

Attorney General John Kroger leads the Oregon Department of Justice. The Department’s mission is to fight crime and fraud, protect the environment, improve child welfare, promote a positive business climate, and defend the rights of all Oregonians.

Contact:

Tony Green, (503) 378-6002 tony.green@doj.state.or.us |