Novartis in $422.5 million settlement over US illegal marketing; cites Swiss law expert on Alcon IDC's legal position in proposed merger

Swiss drug major Novartis (NOVN: VX) says its US subsidiary, Novartis Pharmaceuticals Corp (NPC), has reached a global resolution with the US Attorney's Office for the Eastern District of Pennsylvania (EDPA) regarding the previously disclosed investigation into civil and criminal allegations of the off-label promotion of Trileptal (oxcarbazepine), as well as civil allegations relating to five other products, including its top-selling drug Diovan (valsartan) - which generated sales of some $6 billion last year, Exforge (amlodipine/valsartan), Sandostatin (octreotide, Tekturna (aliskiren) and Zelnorm (tegaserod). Under the agreement, the company will pay a total of $422.5 million in criminal and civil claims.

As part of this total settlement, NPC will plead guilty to one misdemeanor violation of misbranding under the US Food, Drug and Cosmetic Act and pay a fine of $185 million for Trileptal. NPC has also resolved civil allegations under the False Claims Act related to all six drugs and agreed to pay $237.5 million in civil claims.

The settlement "demonstrates the government's continued scrutiny of the sales and marketing practices of pharmaceutical companies that put profits ahead of the public health,” said Thomas Doyle of the US Food and Drug Administration’s Office of Criminal Investigations.