Office of the Attorney General
Attorney General Conway Announces $2.75 Million Settlement with Novartis Pharmaceuticals Corp.

Attorney General Jack Conway today announced a $2.75 million settlement with Novartis Pharmaceuticals Corporation over allegations that the company published false and inflated average wholesale prices (AWPs) for its drugs.

This settlement is the latest in a number of settlements in AWP lawsuits filed by the Office of the Attorney General against 47 pharmaceutical manufacturers. The Kentucky Medicaid program relied on published AWPs to calculate Medicaid drug reimbursement rates. The lawsuits allege that Novartis and the other defendants published false, inflated and deceptive AWPs for their drugs that bore no relationship to the real prices that Novartis was actually charging its customers.

"This type of deception causes the Kentucky Medicaid program to pay millions of dollars more in drug reimbursements," General Conway said. "Taxpayers should not have to foot the bill for these inflated drug prices."

Novartis Pharmaceuticals is a U.S. subsidiary of global pharmaceutical giant Novartis International AG headquartered in Basel, Switzerland. Novartis AG is the second largest pharmaceutical company in the world. It also owns Sandoz, a large manufacturer of generic drugs. Among the many drug products that Novartis manufactures are Clozaril (schizophrenia), Diovan (hypertension), Exelon (Alzheimer's disease), Lotrel (cholesterol), Ritalin (AD/HD) and Tegretol and Trileptal (epilepsy).

Since Attorney General Conway took office in January 2008, his Office of Medicaid Fraud and Abuse Control has recovered or been awarded more than $215 million for the state and federal Medicaid programs. These cases range from lawsuits and settlements against pharmaceutical companies to cases against individual providers.

A settlement is not an admission of liability in a civil case. The Attorney General's Tip Line for reporting allegations of Medicaid fraud is 1-877-228-7384.