U.S. sues Novartis over kickbacks, second case this week
By Jonathan Stempel
NEW YORK (Reuters) - The U.S. government on Friday announced its second civil fraud lawsuit against Novartis AG in four days, accusing a unit of the Swiss drugmaker of paying multimillion-dollar kickbacks to doctors in exchange for prescribing its drugs.
Authorities said the Basel-based company for a decade lavished healthy speaking fees and "opulent" meals, including a nearly $10,000 dinner for three at the Japanese restaurant, Nobu, to induce doctors to prescribe its drugs.
They said this led to the Medicare and Medicaid programs paying millions of dollars in reimbursements based on kickback-tainted claims for medication such as hypertension drugs Lotrel and Valturna and the diabetes drug Starlix.
The charges are detailed in a whistleblower lawsuit first filed against Novartis Pharmaceuticals Corp by a former sales representative in January 2011 and which the U.S. government has now joined.
Twenty-seven U.S. states, the District of Columbia and the cities of New York and Chicago are also plaintiffs in the lawsuit, which seeks triple damages under the federal False Claims Act.
"Novartis corrupted the prescription drug dispensing process," U.S. Attorney Preet Bharara in Manhattan said in a statement. "For its investment, Novartis reaped dramatically increased profits on these drugs, and Medicare, Medicaid, and other federal healthcare programs were left holding the bag."
On Tuesday, the government accused Novartis of inducing pharmacies to switch thousands of kidney transplant patients to its immunosuppressant drug Myfortic in exchange for kickbacks disguised as rebates and discounts.
Novartis spokeswoman Julie Masow said the company disputes the claims in both lawsuits and will defend itself. She also said physician speaker programs are "an accepted and customary practice" in the industry. Continued...