Novartis in Trouble Again for Unethical Kickbacks

Last week the pharmaceutical giant, Novartis International AG, got hit with two lawsuits filed by the U.S. Department of Justice.

• One allegation seeks triple damages and civil penalties for corrupting the dispensing process with multi-million-dollar ‘incentive programs’ thus violating the Federal False Claims Act.
• The other complaint involves kickbacks to at least 20 pharmacies in the form of discounts and rebates if they would switch kidney transplant patients from competing medicines to Novartis’ Myfortic immunosuppressant.

Novartis Turned “Pharmacists into Salespeople”

“Novartis co-opted the independence of certain pharmacists and turned them into salespeople.” – U.S. Attorney Preet Bharara, Manhattan

According to news reports, US Attorney Preet Bhararahas said Novartis tried to conceal the scheme by omitting the agreements from rebate and discount contracts with pharmacies. One pharmacist in Los Angeles was allegedly offered a “bonus” rebate of 5% of their pharmacy’s annual Myfortic sales equaling several hundred thousand dollars in exchange for switching at least 1,000 patients to Myfortic.

Another complaint involves an Arkansas pharmacy increasing sales of Myfortic from $100,000 to $1 million over four years, after being compelled by Novartis. Lawsuit filings describe the details of Novartis reps’ “lavish” wining and dining of doctors as well.

Novartis Called a “Repeat Offender”

Shockingly, the drug maker just paid $422.5 million in 2010 and pleaded guilty to a misdemeanor settling criminal and civil liability charges involving their marketing of the epilepsy drug, Trileptal and several other medications.

A 5-year Corporate Integrity Agreement was signed in September 2010 as a result of the settlement. However, both lawsuits accuse the company of a variety of infractions that occurred afterwards.

Novartis Disputes the Allegations

Novartis is “committed to high standards of ethical business conduct and regulatory compliance in the sale and marketing of our products.” – Julie Masow, Novartis Spokeswoman

If Novartis is convicted of paying people to buy their treatments, and therefore violating anti-kickback statutes, they could be penalized with exclusion – this term means they would be prohibited from contracts with U.S. federal healthcare programs, such as Medicaid and Medicare.

Novartis Ranks 2nd in World-wide Pharmaceutical Sales

• This multinational drug company had sales figures of 46,806 billion in the U.S. alone in 2010.
• Myfortic sales are up 12% from last year with total net sales of $579 million in 2012.

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