Federal officials have filed a second False Claims Act (FCA) lawsuit against Novartis. The second lawsuit alleges that the pharmaceutical giant paid kickbacks to doctors to induce them to prescribe Novartis pharmaceutical products that were reimbursed by federal health care programs. The lawsuit alleges that as a result of the unlawful conduct by Novartis, the federal government paid false claims for reimbursement for Novartis pharmaceutical products. The Justice Department intervened in part in an action before Judge Paul G. Gardephe filed by a whistleblower on January 5, 2011, under the qui tam provisions of the False Claims Act.
This was the second lawsuit to be filed in the Southern District against Novartis alleging illegal kickbacks. The U.S. Attorney’s Office in Manhattan has also sued Novartis for allegedly paying kickbacks disguised as rebates and discounts to pharmacies in exchange for the pharmacies switching patients on CellCept or a generic drug to Novartis’s immunosuppressant drug, Myfortic. U.S. Attorney Preet Bharara issued this statement:
Novartis corrupted the prescription drug dispensing process with multi-million dollar “incentive programs” that targeted doctors who, in exchange for illegal kickbacks, steered patients toward its drugs. And for its investment, Novartis reaped dramatically increased profits on these drugs, and Medicare, Medicaid, and other federal healthcare programs were left holding the bag, doling out millions of dollars in kickback-tainted claims. Healthcare fraud imposes tremendous costs and causes great harm to an already burdened healthcare system, and the government will not tolerate it. The widespread kickback fraud alleged in our two lawsuits against Novartis – which only a few years ago settled a False Claims Act case involving violations of the Anti-Kickback Statute (AKS) based on illegal payments to doctors – makes us question whether Novartis is getting the message.
Novartis, the pharmaceutical company headquartered in East Hanover, N.J., is a subsidiary of Novartis AG, an international pharmaceutical company headquartered in Basel, Switzerland. Federal officials alleged that:
• Novartis systematically violated the anti-kickback law, which prohibits the payment of remuneration to induce referrals of items or services covered by Medicare, Medicaid and other federally-funded programs;
• The company violated its own internal policies concerning speaker programs, which require that the programs have an educational purpose and that slides about the company’s drugs be presented;
• Novartis violated the anti-kickback law by paying doctors to speak about certain drugs, including its hypertension drugs Lotrel and Valturna and its diabetes drug Starlix, at events that were often little or nothing more than social occasions for the doctors.
The government says the payments and lavish dinners given to the doctors were, in reality, kickbacks to the speakers and attendees to induce them to write prescriptions for Novartis drugs. It appears, based on the charges, that in many instances Novartis made payments to doctors for purported speaker programs that either did not occur at all or that had few or no attendees. Thousands of the programs were held all over the country. It was reported that few or no slides were shown at any of the programs and the doctors who participated spent little or no time discussing the drug at issue. Many speaker programs were said to have been held in circumstances in which it would have been virtually impossible for any presentation to be made, such as on fishing trips off the Florida coast.
Novartis’s internal analyses show that speaker programs had a high return on investment in terms of the additional prescriptions for its drugs written by the doctors who participated in the programs, both as speakers and attendees, with the highest return arising from payments to doctors as “honoraria” for speaking. In short, doctors increased the number of prescriptions they wrote when they were being paid by Novartis to speak about a drug. As a result, Novartis spent millions on speaker programs yearly. According to Novartis’ data, during the period from January 2002 through November 2011 it spent nearly $65 million and conducted more than 38,000 speaker programs for just three drugs: the hypertension drugs, Lotrel and Valturna, and the diabetes drug, Starlix.
In September 2010, Novartis entered into a settlement with the U.S. Department of Justice to settle False Claims Act lawsuits based in part on violations of the AKS due to illegal remuneration paid to doctors through such mechanisms as speaker programs, and signed a Corporate Integrity Agreement (CIA) with the U.S. Department of Health and Human Services Office of Inspector General agreeing to implement a rigorous compliance program. Even after entering into the CIA, it was alleged that Novartis’ compliance program was inadequate to prevent kickbacks from being paid in conjunction with Novartis’ speaker programs.
Source: Corporate Crime Reporter
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