TEXAS IN PACT WITH NOVARTIS OVER MEDICARE FRAUD ALLEGATIONS

     (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 
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.
 
 
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