Ken Paxton

Tuesday, October 30, 2012

Texas Attorney Generals Office Secures $19.9 Million Agreement with Drug Maker over Medicaid Fraud Allegations

AUSTIN Texas Attorney General Greg Abbott today announced the resolution of a civil Medicaid fraud enforcement action against Swiss-based pharmaceutical drug company Novartis for unlawful and deceptive marketing of a topical skin cream product.

Under today’s agreement, Novartis must pay a total of $19.9 million to resolve the State of Texas and the federal government’s allegations of off-label marketing. Texas’ share of the settlement proceeds is $6,638,250. The State’s investigation revealed that Novartis unlawfully marketed eczema drug Elidel to treat infant children while failing to disclose the drug’s known harmful side effects including cancer-related risks.

Evidence uncovered by the State revealed that Novartis improperly urged physicians to prescribe Elidel to children under two years of age for purposes that had not been approved by the U.S. Food and Drug Administration. Because of the defendant’s misrepresentations, the Texas Medicaid program overpaid for Elidel prescriptions.

Because Medicaid is jointly funded by the State and the federal government, the federal government is entitled to a share of the $19.9 million total monetary settlement. Under the Texas Medicaid Fraud Prevention Act, the relator-whistleblower who uncovered the defendant’s unlawful conduct and reported it to authorities will also receive a share of the total monetary settlement. Additionally, the Texas Attorney General’s Office and the relator-whistleblower will recover investigative and legal costs associated with the enforcement action.

The Texas Attorney General’s civil Medicaid fraud team included: Chari Kelly, Linda Halpern, Cynthia O’Keeffe, Kris Kennedy, Kevin Moczygemba, Carl Myers, Justin Dunlap, Rudy Moya, Janice Garrett and Raymond Winter.