Novartis hit with two lawsuits by the U.S. Justice Department

April 30, 2013 | By Márcio Barra

The US subsidiary of Novartis has been hit with two lawsuits filed by the federal government of the US, the first one early last week and the second last Friday for a series of alleged infractions, including paying kickbacks (incentives) to pharmacies and physicians  for prescribing the company’s medication in place of others.

The first lawsuit saw Novartis being accused by the US Government of fraud against the Medicare and Medicaid programs, where at least twenty pharmacies were paid for switching patients over to Novartis’ immunosuppressant drug Myfortic.

The second lawsuit brings physicians into the mix. U.S. Attorney Preet Bharara stated that “Novartis corrupted the prescription drug dispensing process with multi-million dollar ‘incentive programs’ that targeted doctors who, in exchange for illegal kickbacks, steered patients toward its drugs,” including Novartis blood pressure drugs Lotrel and Valturn, and the diabetes drug Starlix.

These incentive programs, according to the Department of Justice’s press statement, could go from speaker fees to $1,672-per-person dinners at a Washington, DC establishment.

The Department of Justice is now seeking damages of three times the expenses incurred to federal programs like Medicare, Medicaid and Tricare. The exact amount remains unknown.

These events violated Novartis’ own policies, as the company signed in 2010 an agreement with the Department of Justice, known as a Corporate Integrity Agreement (CIA). The agreement was put into place to prevent the company from instituting the very payments it is now charged with.

This agreement failed because “no individual at the company was tasked with examining its speaker program data to determine whether the programs were used for an illegitimate purpose”, said the Department of Justice.

Novartis speaker programs also require that they have an educational purpose and a slide share presentation about the company’s drugs, which clearly couldn’t have happened in some cases.

A Novartis spokeswoman said in a statement that the company disputed the characterization of its “promotional programs”, and planned to defend itself against the charges in court.


US Department of Justice

Regulatory Focus

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