U.S. sues Novartis, alleging kickbacks to pharmacies

Tue Apr 23, 2013 6:41pm EDT
 
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By Bernard Vaughan and Jonathan Stempel

(Reuters) - The U.S. government filed a civil fraud lawsuit against Novartis AG on Tuesday, accusing a unit of the Swiss drug maker of causing the Medicare and Medicaid programs to pay tens of millions of dollars in reimbursements based on fraudulent, kickback-tainted claims.

U.S. Attorney Preet Bharara in Manhattan said Novartis Pharmaceuticals Corp had since 2005 induced at least 20 pharmacies to switch thousands of kidney transplant patients to its immunosuppressant drug Myfortic from competitors' drugs, in exchange for kickbacks disguised as rebates and discounts.

He said Novartis tried to conceal the scheme by omitting the agreements from rebate and discount contracts with pharmacies.

In one alleged case, Novartis offered a Los Angeles pharmacist a "bonus" rebate of 5 percent of that pharmacist's annual Myfortic sales, or several hundred thousand dollars, to switch as many as 1,000 patients to Myfortic.

"Novartis co-opted the independence of certain pharmacists and turned them into salespeople," Bharara said in a statement.

The lawsuit was filed in U.S. District Court in Manhattan, and seeks civil penalties and triple damages from Novartis for violating the federal False Claims Act.

Novartis disputes the claims and will defend itself, spokeswoman Julie Masow said in an email.

Novartis is "committed to high standards of ethical business conduct and regulatory compliance in the sale and marketing of our products," Masow said.   Continued...

 
A Novartis logo is pictured on its headquarters building in Mumbai April 1, 2013. REUTERS/Vivek Prakash