NY lawsuit accuses Novartis of health care fraud

by Larry Neumeister

The U.S. government sued Novartis Pharmaceuticals Corp. Tuesday, claiming it gave kickbacks to pharmacies to switch kidney transplant patients from competitors' drugs to its own.

The civil lawsuit in U.S. District Court in Manhattan seeks unspecified damages and civil penalties for a scheme that the government said has been carried out since 2005.

U.S. Attorney Preet Bharara said the company used the "lure of kickbacks disguised as rebates" to turn 20 or more pharmacies into a sales force for its drug, Myfortic. He said the company's actions caused the public to pay tens of millions of dollars for kickback-tainted drugs dispensed by pharmacists who had buddied up to .

Bharara said Novartis is a repeat offender, having settled based on kickbacks less than three years ago.

Novartis said in a statement that it disputes the claims and will defend itself. It said the investigation into the company's interactions with specialty pharmacies related to the handling of Myfortic had been previously disclosed.

"As a leading healthcare company, Novartis strives to achieve high performance with high integrity. NPC is committed to high standards of ethical business conduct and regulatory compliance in the sale and marketing of our products," the company said.

In its lawsuit, the government said Novartis had disguised kickbacks as performance rebates and discounts to convince pharmacies to switch patients to Myfortic from competitor's drugs and to oppose the use of a cheaper, generic immunosuppressant drug.

The government said Novartis offered one pharmacist in Los Angeles a "bonus" rebate amounting to several hundred thousand dollars to induce the to "shoulder the burden" of switching 700 to 1,000 transplant patients to Myfortic.

According to the lawsuit, Novartis found it was highly profitable to pay pharmacies even 10 percent to 20 percent kickbacks in exchange for switching transplant patients.

The government said the arrangement violated the federal anti-kickback statute prohibiting the offer or payment of rebates and other inducements to cause the purchase of any drug or service covered by Medicare, Medicaid or other healthcare program.

not rated yet
add to favorites email to friend print save as pdf

Related Stories

FDA issues Myfortic tablets safety alert

Nov 28, 2007

The U.S. Food and Drug Administration issued a safety alert for pregnant patients using the kidney transplant drug Myfortic delayed-release tablets.

Novartis fined $422.5M in marketing, kickback case

Sep 30, 2010

(AP) -- Novartis Pharmaceuticals Corp. will pay $422.5 million in penalties for marketing an epilepsy medicine for unapproved uses and for paying kickbacks to doctors to prescribe it and five other drugs, ...

Novartis tries to make UK hospitals use $1000 drug

Apr 24, 2012

(AP) -- Drug maker Novartis says it is taking legal action in Britain to make hospitals use an eye drug that costs 700 pounds ($1,130) per shot instead of a cheaper one that costs 60 pounds ($97).

Novartis announces 2,000 job losses, profits up

Oct 25, 2011

Swiss pharmaceutical giant Novartis announced 2,000 job losses Tuesday, mostly in Switzerland and the United States, while reporting net profits of $3.53 billion (2.5 billion euros) for the third quarter.

Recommended for you

US approves new, hard-to-abuse hydrocodone pill (Update)

Nov 20, 2014

U.S. government health regulators on Thursday approved the first hard-to-abuse version of the painkiller hydrocodone, offering an alternative to a similar medication that has been widely criticized for lacking ...

Soaring generic drug prices draw Senate scrutiny

Nov 20, 2014

Some low-cost generic drugs that have helped restrain health care costs for decades are seeing unexpected price spikes of up to 8,000 percent, prompting a backlash from patients, pharmacists and now Washington ...

Only half of patients take their medications as prescribed

Nov 20, 2014

The cost of patients not taking their medications as prescribed can be substantial in terms of their health. Although a large amount of research evidence has tried to address this problem, there are no well-established ...

Interpol call for roadmap to tackle fake drugs

Nov 19, 2014

Interpol on Wednesday called for a greater global response to pharmaceutical crime as it warned criminal gangs were capitalising on weaknesses in legislation and border controls.

User comments

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.