Complaints by three former executives of Emeryville-based Chiron Corp. led to a $72.5 million government settlement with the international drug company Novartis AG, according to court documents.
The U.S. Justice Department on Tuesday announced the settlement of a false claims lawsuit pending against Novartis in federal court in San Francisco.
Novartis, based in Basel, Switzerland, acquired Chiron, a biotechnology company, in 2006.
The lawsuit alleged that Chiron and Novartis improperly marketed a cystic fibrosis drug for unauthorized uses, sometimes known as off-label uses, and submitted false claims for the drugs to various federal and state health care programs between 2000 and 2006.
It is not illegal for a doctor to prescribe a drug for an off-label use, but it is illegal for a company to market and promote a drug for a purpose not authorized by the Food and Drug Administration.
The so-called whistleblower lawsuit was originally filed in 2006 by former Chiron national accounts director Robert Lalley, account manager Courtney Davis and north Los Angeles area business manager William Manos.
The U.S. government took over as the plaintiff in the case in 2008 under a procedure allowed in the U.S. False Claims Act.
The lawsuit, unsealed last week, alleges that Lalley and Manos were fired by Chiron in 2005 in retaliation for complaining internally within the company about the alleged improper marketing.
Novartis, while agreeing to the settlement, has denied any wrongdoing.
The company said in a statement Tuesday that “we disagree with and expressly deny the allegations of the federal government” and the whistleblowers.
Under the settlement, the federal government will receive $35.7 million, 10 states including California will receive $29 million, and the three whistleblowers and their lawyers will be given $7.8 million.
U.S. attorney’s office spokesman Jack Gillund said today that California’s share of the state settlements will be $1.7 million.