Swiss pharmaceutical company Novartis AG agreed to pay $72.5 million to resolve charges of off-label marketing of the cystic fibrosis drug TOBI.

Novartis Building_Flickr_CropThe U.S. Justice Department said that Chiron, a biotechnology company acquired by Novartis in 2005, and then Novartis, marketed TOBI from January 2001 through July 2006 for uses unapproved by the Food and Drug Administration.

Under the agreement the federal government will get $43.5 million and 10 U.S. states will share $29 million to settle their respective claims. The government alleged that Novartis’ conduct  violated the U.S. False Claims Act.

The Justice Department said the settlement resolves a lawsuit brought by three former Chiron employees – Robert Lalley, Courtney Davis and William Manos – under the qui tam or whistleblower provisions of the False Claims Act, which permit private individuals known as relators to bring a lawsuit on behalf of the United States and to share in any recovery. The three former employees will share $7.825 million – or about 18 percent – of the federal share of the settlement.

In announcing the settlement, the Justice Department said it has used the False Claims Act to recover about $2.3 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department’s total recoveries in False Claims Act cases since January 2009 have topped $3 billion.

Photo: by Andrew, courtesy Flickr.