Novartis AG (NOVN) agreed to pay $19.9 million to resolve claims by Texas and U.S. that it unlawfully marketed Elidel, a topical cream used to treat eczema, state Attorney General Greg Abbott said.
“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,” Abbott said today in a statement.
As a result, the state’s Medicaid program “overpaid” for those prescriptions, he said.
The company also failed to disclose known harmful side effects associated with the medicine, including a risk of cancer, according to the attorney general.
Medicaid is a joint state and federal program. Novartis’s payment will be divided among Texas, which will get $6.6 million, the U.S. and an unidentified whistle-blower who Abbott said uncovered the alleged conduct.
Julie Masow, a New York-based spokeswoman for Basel, Switzerland-based Novartis, didn’t immediately reply to an e- mailed request for comment on the attorney general’s statement. The U.S. Justice Department press office didn’t immediately respond to a voice-mail message seeking comment.