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Novartis to Pay $49.2 Million in Civil, Criminal Penalties

From Bloomberg News

A unit of Novartis agreed to pay $49.2 million in civil and criminal fines and be excluded from federal healthcare contracts to resolve a probe into its marketing of nutritional products to Medicare and Medicaid.

Novartis’ OPI Properties will pay a criminal fine of $4.5 million for trying to obstruct a federal audit, said Ronald J. Tenpas, U.S. attorney for the Southern District of Illinois. The company will pay an additional $44.7 million to settle civil charges involving Medicare and Medicaid, the U.S. health plans for elderly, poor and disabled Americans.

The agreement is part of a broader U.S. investigation into billing and marketing practices in the enteral nutritional products industry, which makes liquid supplements and equipment for patients on feeding tubes.

Prosecutors have collected $670 million in fines. Abbott Laboratories agreed to pay $622 million in 2003 as part of the same probe.

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“The quality of our products or their safety was never in question,” said Sheldon Jones, a U.S. spokesman for Basel, Switzerland-based Novartis.

The FBI, the U.S. Postal Inspection Service and the inspector general for the Department of Health and Human Services participated in the investigation.


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