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Novartis subsidiary reaches settlement agreement with US Attorney’s Office

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Novartis Pharmaceuticals Corporation (NPC), a US subsidiary of Novartis AG, 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 as well as civil allegations relating to five other products: Diovan, Exforge, Sandostatin, Tekturna and Zelnorm. Under the agreement, the company will pay a total of USD 422.5 million in criminal and civil claims.
 
Novartis had previously disclosed information regarding the EDPA investigation. This disclosure included the total monetary provisions amounting to USD 422.5 million that were set aside and disclosed in the second quarter of 2010 for the civil and criminal Trileptal investigations and the five products investigation.
 
In 2005, NPC received a subpoena from the EDPA related to promotional practices with respect to Trileptal. Prior to receiving the subpoena, NPC had already taken steps to correct the challenged practices and comply with new government guidance. NPC cooperated fully with the government throughout the course of this investigation, as well as the investigations of the five other products covered under the settlement. As part of this settlement totaling USD 422.5 million in criminal and civil claims, NPC will plead guilty to one misdemeanor violation of misbranding under the US Food, Drug and Cosmetic Act and pay a fine of USD 185 million for Trileptal. NPC has also resolved civil allegations under the False Claims Act related to all six drugs and agreed to pay USD 237.5 million in civil claims.
 
“We are pleased to have reached resolution on this matter. NPC will continue its commitment to high standards of ethical business conduct and regulatory compliance in the sale and marketing of our products,” said Andy Wyss, Head of Novartis Pharma North America and President of Novartis Pharmaceuticals Corporation. “Our goal is to ensure that patients receive the medicines they need and we will continue to work with the government and other organizations to improve healthcare for all Americans.”
 
As part of the settlement, the Company will also be entering into a Corporate Integrity Agreement with the Office of the Inspector General of the US Department of Health and Human Services. Under the terms of this agreement, NPC will implement for five years additional compliance-related measures, which include additional monitoring, auditing, training, education, reporting and disclosures. This agreement will expand upon the Company’s already strong commitment to sustainable performance built on a solid foundation of ethical values at all levels of business.
 
In addition to adhering to the principles of ethical business conduct outlined in the NPC Code of Conduct, NPC associates are guided by the specific standards for marketing activities described in the NPC Ethics & Compliance Policy. The Company is firmly committed to these guidelines and strengthens its compliance practices and policies on a continuing basis.

Novartis



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