Why Novartis agreed to pay a whopping $370 million to settle drug kickbacks case

Novartis Pharmaceuticals, maufacturer of Excedrin, Ritalin and other popular drugs, this week agreed to pay $370 million for paying kickbacks to pharmacies to push its drugs on patients. Federal prosecutors said Novartis’ scheme involved two drugs, including Exjade, used to reduce iron overload in patients who are receiving long-term blood transfusions.

In 2007, sales of Exjade fell, in part because the side affects were worse than expected. Exjade can cause kidney and liver failure. To bump up sales, Novartis pressured several specialty pharmacies to hire or assign nurses to call patients and, under the guise of education or clinical counseling, getting them to order more refills.

In January 2008, pharmacy Accredo provided Novartis with a call script that the nurse at Accredo would use to convince patients to take Exjade. ΠIt directed the nurse to tell patients why Exjade was important for their treatment, but it did not suggest a discussion of the risks involved.

Novartis also paid rebates to pharmacies for recommendation to doctors to switch their patients to Myfortic, a drug that prevents organ transplant rejection.