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Feb 22, 2010 5:51 PM by Bea Karnes, News First 5

NJ drug company agrees to pay $3.5 settlement

Federal prosecutors say a New Jersey pharmaceutical company has agreed to pay $3.5 million to settle allegations that it claimed its heart drug was eligible for Medicaid reimbursement.

The U.S. attorney's office in Boston said Monday that Eon Labs Inc., a subsidiary of Swiss company Novartis AG, submitted false reports to the government between April 1999 and September 2008 that misrepresented Nitroglycerin SR's regulatory status and failed to advise that the drug did not qualify for Medicaid coverage.

Prosecutors say Princeton, N.J.-based Eon Labs did so even after the Food and Drug Administration determined that there was a lack of evidence that Nitroglycerin SR was effective.

The agreement settles a whistleblower lawsuit. A spokeswoman for the company said in a statement the settlement brings "final closure to the lawsuit."

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