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Ohio to Receive $1.7 Million in Medicaid Fraud Settlement with Pharmaceutical Company

Novartis to pay $72.5 million to settle with states and federal government

(COLUMBUS, Ohio) — Attorney General Richard Cordray has announced that Ohio will receive $1.7 million as part of a nationwide settlement with Novartis Pharmaceuticals Corp. and Novartis Vaccines and Diagnostics Inc. The agreement resolves allegations that the company promoted the use of tobramycin, a cystic fibrosis drug, for uses not approved by the U.S. Food and Drug Administration.
"Novartis was improperly promoting the use of this drug and ultimately cheating the state's Medicaid program," said Cordray. "By working together with other state and federal authorities, we are able to aggressively pursue cases of fraud and abuse within our health care system."
Under the terms of the agreement, Novartis will pay 49 states, the District of Columbia and the federal government $72.5 million to compensate Medicaid and various federal health care programs. The total state and federal recovery for the state of Ohio will be $4,418,265. That amount includes $2,694,114 to reimburse the federal share of Medicaid. The remaining $1,724,151 will be returned to the state of Ohio.
The participating states and the federal government alleged that from January 2001 through July 2006, tobramycin was marketed for unapproved uses that led to false claims being filed with state Medicaid programs. The off-label marketing included promoting the drug for treatment of diseases other than cystic fibrosis and for use in cystic fibrosis patients under the age of 6.
A team representing the National Association of Medicaid Fraud Control Units conducted settlement negotiations with Novartis on behalf of the states. Team members included representatives of the New York, California and Illinois Medicaid Fraud Control units, and a former member of the Oregon Medicaid Fraud Control Unit.
The Ohio Attorney General's office investigates and prosecutes health care providers who defraud the state's Medicaid program and also enforces Ohio laws protecting mentally or physically disabled or elderly citizens from financial exploitation, neglect and abuse in long-term care facilities. Last year, the office's Health Care Fraud section recovered a record $91.4 million, breaking the previous year's record of $65.2 million. Indictments increased from 164 in 2008 to 228 in 2009, and convictions rose from 187 to 216 last year.
Anyone who suspects patient abuse or neglect or Medicaid fraud can contact the Ohio Attorney General's office at (800) 282-0515 or online at