The Swiss drug manufacturer Novartis has been accused by the U.S. government of a kickback scheme involving paying doctors millions in kickbacks to promote and prescribe their drugs.The drugs involved in this case including Lotrel and Valturna, which treat hypertension, as well as Starlix for diabetes. The kickbacks to the docs also included what was considered a speaking fee, where doctors would be paid to discuss the drugs at educational events and even within their own office. The doctors were also treated to meals that can be considered lavish at the price point of $9,750 for three dinners at a Japanese restaurant.
Unlike a straightforward bribe, kickbacks involve an action being completed after negotiated bribery in the form of a commission or rebate. It is generally viewed as illegal since it gives many companies an unfair advantage in the industry they work for. The False Claims Act is what pushes liability for such actions onto those who attempt to defraud governmental programs such as health insurance.
The Novartis case started in 2011, when a former sale representative, Oswald Bilotta, filed a whistleblower lawsuit under the federal False Claims Act. This type of action allows individuals who have discovered criminal action or intent to come forward on behalf of the government. When a case such as this is filed, the government does hold the right to get involved whenever they deem necessary. In the case of Novartis, Bilotta made the principal claim in 2011 followed by the U.S. government and state of New York intervening in 2013.
The federal Medicare and Medicaid programs were billed millions from the years 2002 to 2011 from doctors who took kickbacks and violated the False Claims Act. The government is now seeking three times these damages.
Evidence of this kickback scheme was presented by the government. Novartis placed a bid to U.S. District Judge Paul Gardephe in Manhattan in hopes of keeping this essential government evidence out of the case but was said to be swiftly rejected. The district judge also ruled that the government is not required to prove an exact agreement between the doctors and the drug company in order to find them liable for these actions.
What this essentially means is that Novartis will be heading for trial unless they are able to come to a settlement with the government.
“We are disappointed in today’s decision and look forward to presenting our case at trial,” Novartis spokesman,Eric Althoff, stated in an email. “We continue to believe that the government has insufficient evidence to support its claims.”, he added.
This would not be the first time Novartis settled U.S. allegations based on their methods of promoting their medicine. In 2015, they paid $390 million to settle a claim involving allegedly paying rebates to specialty pharmacies for pushing two of its drugs, and in 2010 they paid $422 million for various civil and criminal allegations also involving kickbacks. Since they chose to settle in these cases, they were not required to admit to any wrongdoing besides the mislabeling of one drug.
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