Authorities in US sue Novartis in kickback scheme

by Jake Pearson

Novartis Pharmaceuticals Corp. paid kickbacks to a specialty pharmacy in exchange for recommending refills of a blood transfusion drug it produces, according to an amended complaint filed Wednesday in a civil case brought by state and federal prosecutors in New York.

The East Hanover, New Jersey-based company boosted its sales of the iron-reduction drug Exjade by giving referrals and rebates to pharmacy BioScrip, which recommended refills to its but often ignored warning them of the drug's potentially fatal side effects, which include kidney failure and gastrointestinal hemorrhaging, according to the complaint filed in Manhattan federal court.

BioScrip, based in Elmsford, New York, agreed to pay $15 million to settle charges that it caused pharmacies to submit tens of thousands of false claims to Medicare and Medicaid, New York Attorney General Eric T. Scheniderman said.

"This arrangement between Novartis and BioScrip was dangerous for patients and is against the law," he said in a statement. "Our lawsuit against Novartis and our agreement with BioScrip send a clear message: Drug companies cannot pay pharmacies to promote drugs directly to patients."

In a statement, Novartis disputed the allegations and said it would defend itself against the litigation.

"At NPC, patients are the focus of all that we do," said company president Andre Wyss. "We want to support the best possible outcome for a patient taking a Novartis medication prescribed by their physician."

A spokesman for BioScrip didn't return a message seeking comment.

As part of its settlement with the government, BioScrip said that, beginning in 2007, Novartis told the pharmacy its refills for Exjade patients were too low and that it would lose referrals if it didn't raise its numbers, according to court documents.

The pharmacy, using employees in an Ohio call center, encouraged patients—some who had stopped using the drug—to refill their Exjade orders, according to the lawsuit.

The lawsuit seeks tens of millions of dollars in Medicare and Medicaid reimbursements.

Last April, sued Novartis, accusing it of using kickbacks disguised as rebates to turn 20 or more pharmacies into a sales force for its own drug, Myfortic, which is used for .

5 /5 (1 vote)
add to favorites email to friend print save as pdf

Related Stories

NY lawsuit accuses Novartis of health care fraud

Apr 24, 2013

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.

US sues Novartis in NY again, cites doc kickbacks

Apr 26, 2013

The U.S. government sued Novartis Pharmaceuticals Corp. again on Friday, saying it paid kickbacks for a decade to doctors to steer patients toward its drugs, sometimes disguising fishing trips off the Florida coast and trips ...

Feds fine St. Louis drug maker $3.5 million

Jul 19, 2013

(AP)—A St. Louis-based drug maker is paying $3.5 million to settle a federal lawsuit that it illegally paid doctors to prescribe out-of-date antidepressants and sleep aids to Medicare and Medicaid patients.

Japan to file criminal complaint against Novartis (Update)

Jan 07, 2014

Japan's health ministry plans to file a criminal complaint against the local arm of Swiss pharmaceutical giant Novartis over alleged exaggerated advertising for a popular blood-pressure drug, an official said Wednesday.

Recommended for you

Supermaterial gives rejected drugs a new chance

18 minutes ago

More than 80 percent of all drug candidates in the pharma R&D suffer from poor solubility and are therefore rejected early in the drug discovery process. Now Uppsala University researchers show that the new ...

Risk of antibiotic overuse in aged care settings

Jul 21, 2014

Antibiotics are being overused in residential aged care facilities (RACFs), and more integrated efforts to improve antibiotic prescribing practices need to be introduced, researchers say. 

Ruconest approved for rare genetic disease

Jul 17, 2014

(HealthDay)—Ruconest has been approved by the U.S. Food and Drug Administration to treat hereditary angioedema, a genetic disease that leads to sudden and potentially fatal swelling of the hands, feet, limbs, face, intestinal ...

NIH system to monitor emerging drug trends

Jul 17, 2014

An innovative National Drug Early Warning System (NDEWS) is being developed to monitor emerging trends that will help health experts respond quickly to potential outbreaks of illicit drugs such as heroin and to identify increased ...

User comments