Novartis sued for kickbacks

They just can't seem to keep their nose out of trouble.  Novartis in 2010 was found guilty in 2010 of all kinds of criminal behavior, paying $422 million in fines.  They settled charges of

Specifically, the civil settlement resolves allegations that Novartis illegally promoted Trileptal for a variety of uses, including psychiatric and pain uses, which were not medically accepted indications and therefore not covered by those programs. In addition, the agreement resolves allegations that the company paid kickbacks to health care professionals to induce them to prescribe Trileptal and five other drugs, Diovan, Zelnorm, Sandostatin, Exforge and Tekturna. The federal share of the civil settlement is $149,241,306, and the state Medicaid share of the civil settlement is $88,258,694.

Novartis also signed a Corporate Integrity Agreement (CIA) with the Department of Health and Human Services, Office of Inspector General (HHS-OIG). The company is subject to exclusion from Federal health care programs, including Medicare and Medicaid, for a material breach of this CIA and subject to monetary penalties for less significant breaches. Among other things, the CIA requires the board of directors (or a committee of the board) to annually review the company’s compliance program with the help of an outside expert and certify its effectiveness; that certain senior executives annually certify that their departments or functional areas are compliant; that Novartis send doctors a letter notifying them about the settlement; and that the company posts on its website information about payments to doctors, such as honoraria, travel or lodging. The five-year agreement further requires the implementation of a compliance program addressing promotional activities.

Less than three years later, they're baaaaack!  Now they have had two new suits filed by the government for new charges of kickbacks, bribes paid to doctors, lavish meals, fishing trips, and "speaker" events held at Hooters.  The new charges, still within the 5-year settlement period could result in them being excluded from Medicare and Medicaid programs altogether according to the article in Forbes. 

Novartis also charges $100,000 / year for their life saving drug Gleevec as I mentioned in a previous post.  Here are a few of their most recent No-No's.

Payments and ‘lavish’ dinners given to doctors, for instance, were purportedly kickbacks to speaker and attendees to  induce them to prescribe different Novartis meds. However, the feds say some programs never actually occurred or doctors never spoke about the drug at issue. Some presentations were made on fishing trips off the Florida coast or at a Hoosters restaurant. Just imagine the intense focus on a slide presentation under such circumstances (you can read the legal filings in the latest lawsuit here and here).  And Novartis did not scrimp on the doctors, either. The drugmaker “frequently” treated them to expensive dinners hosted at high-end restaurants, according to the feds. For example, a dinner for three, including the speaker, at a Washington, DC, restaurant cost $2,016, or $672 per person. Novartis also paid a $1,000 honorarium to the speaker for this program.  One of the two attendees had attended the same program a short time earlier. At another program held on Valentine’s Day in 2006, Novartis paid $3,127, for a meal for two at a West Des Moines, Iowa restaurant, or $1,042 per person. But as the lawsuit alleges, the return on these indulgences was worth the investment.

 As for Novartis, the drugmaker ”disputes the claims in both cases and will defend itself in these litigations… Discounts and rebates by pharmaceutical companies are a customary, appropriate and legal practice as recognized by the government itself. The suit on Myfortic is a significant expansion of the Anti-Kickback Statute that is inconsistent with law and policy in this area and the theory in this case threatens to undermine pharmaceutical company discounting practices that benefit both consumers and payers, including the government. Physician speaker programs are an accepted and customary practice in the industry. These are promotional programs designed to inform physicians about the appropriate use of our medicines. Novartis invests significant time and resources to help ensure these programs are conducted in an ethical and responsible manner. We are dedicated to doing it right” (here is the complete Novartis statement).

Stay tuned.