Eon Labs Settles False Claims Allegations for $3.5 Million

Eon Labs, a subsidiary of Sandoz, which is in turn a subsidiary of Novartis AG, has agreed to pay $3.5 million to the federal government to resolve allegations that it submitted false claims to Medicaid involving the company's Nitroglycerin Sustained Release capsules, according to a Department of Justice news release.

In April 1999, the Food and Drug Administration determined that Nitroglycerin SR lacked substantial evidence of effectiveness and published a notice proposing to withdraw approval of the product, which, according to the government, made the drug no longer eligible for reimbursement by government healthcare programs such as Medicaid.

The government further alleges that, from April 1999 continuing through Sept. 2008, Eon submitted false quarterly reports to the government that misrepresented Nitroglycerin SR's regulatory status and failed to advise that Nitroglycerin SR no longer qualified for Medicaid coverage. As a result, the government contends, Eon knowingly caused false Medicaid claims to be submitted for Nitroglycerin SR.

The government's allegations stem from a multi-defendant whistleblower action, United States ex rel. Conrad v. Eon Labs, Inc., et al. Under this settlement, the whistleblower will receive approximately $525,000.

Read the DOJ's release on the Eon Labs False Claims settlement.

© Copyright ASC COMMUNICATIONS 2012. Interested in LINKING to or REPRINTING this content? View our policies by clicking here.