Novartis AG will pay $72.5 million to settle U.S. Justice Department allegations it submitted false claims for off-label uses of a cystic-fibrosis drug.
The drug, tobramycin or TOBI, joined the Novartis portfolio as part of its 2005 takeover of biotechnology firm Chiron Corp.
In a release Tuesday, the Justice Department said that, between 2001 and 2006, Chiron, and then Novartis, marketed unapproved uses for TOBI, which the Food and Drug Administration approved as an inhaled antibiotic for treating certain cystic-fibrosis patients.
This is not even the first US legal settlement this year for Novartis:
Earlier this year, Novartis said its U.S. subsidiary struck an agreement with the U.S. Attorney's Office in Pennsylvania to settle a criminal investigation of the company's marketing of the epilepsy drug Trileptal. Novartis agreed to plead guilty to violating the U.S. Food, Drug and Cosmetic Act, and to pay a $185 million fine.
We had posted on that previous settlement here.
So the march of legal settlements continues. It seems that practically every major pharmaceutical corporation has participated in multiple settlements since we started Health Care Renewal. Yet the process does not seem to deter continuing bad behavior.
In the current case, like nearly all the others, the corporation will pay what seems to be a huge fine. However, the amount is a pittance compared to the corporation's revenue, and is likely to be viewed as only a small cost of doing a very lucrative business by corporate executives. In very few cases does any individual suffer any negative consequence for approving, ordering or implementing the unethical behavior. A large fine's impact can be spread among share-holders, employees, and clients/ customers/ patients, and hence poses no threat to executives planning the next bit of unethical behavior.
As I have said before, endlessly, we will not deter unethical behavior by health care organizations until the people who authorize, direct or implement bad behavior fear some meaningfully negative consequences. Real health care reform needs to make health care leaders accountable, and especially accountable for the bad behavior that helped make them rich.