Novartis Sued by Federal Government for Massive Kickback Scheme

Novartis Sued by Federal Government for Massive Kickback Scheme

April 24th, 2013 // 12:43 pm @

Breaking FDA and cGMP Compliance News

The US government is suing Novartis for allegedly providing kickbacks – rebates and discounts – to more than 20 pharmacies. They allegedly did this in exchange for changing transplant patients from competitors’ medicines to Myfortic, which is an immunosuppressant medicine. So, both Medicare and Medicaid paid too much based upon the phony claims that pharmacists filed.

If the company did indeed hide this illegal scheme from doctors, patients and the US government, Novartis causes the American public to pay millions of dollars for kickback drugs that were given out by pharmacists, who were illegally favoring Novartis.

One of the big problems for Novartis in this alleged kickback case is that the drug maker has been caught doing this before.

In 2009 there was a case where Novartis paid out $422 million and pleaded guilty for promoting Trileptal and other drugs illegally.

So, Novartis signed a Corporate Integrity Agreement that spans 5 years. Novartis pledged to not engage in such illegal practices and to report violations to the feds. The kickback scheme outlined above occurred both before and after this agreement was signed. It is unclear if the US government thinks the agreement was violated.

In this recent kickback case, a manager from Novartis alleges that the drugmaker offered a certain pharmacist a bonus rebate which equaled five percent of his sales for Myfortic. This would amount to hundreds of thousands of dollars.

Even with such a big pay out, Novartis allegedly found that the company made money if it paid pharmacists as much as twenty percent in kickbacks if they would switch transplant patients to their drug. This short term cost helped to earn Novartis what the feds described as a long term annuity.

Novartise has only said at this time that it did receive a complaint from the US Attorney’s Office in New York. Novartis states that it disputes the claim and will defend itself in the lawsuit.

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