(The following press release from the Texas Attorney General’s Office was
received by e-mail. The sender verified the statement.)
October 30, 2012
Texas Attorney General’s 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
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
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.
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