UPDATE 1-Novartis to pay $390 mln in U.S. settlement over pharmacy kickbacks

Fri Nov 20, 2015 3:08pm EST
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(Adds details on case, comments from whistleblower, company)

By Sarah N. Lynch

WASHINGTON Nov 20 (Reuters) - Novartis Pharmaceuticals Corp will pay $390 million to settle U.S. charges that it paid specialty pharmacies illegal kickbacks in exchange for inducing patients to refill certain medications, according to an accord announced Friday.

The settlement between a U.S. unit of Swiss drugmaker Novartis AG, the federal government and more than 40 states concerns payments that the drug manufacturer paid between 2007 and 2012 to certain specialty pharmacies to entice them to recommend prescriptions to Medicaid and Medicare patients.

The federal part of the case, brought by the U.S. Attorney for the Southern District of New York, involved six drugs including iron-reducing Exjade and immunosuppressant Myfortic.

In the settlement, Novartis admitted to a series of facts detailing its relationship with specialty pharmacies and how the alleged scheme worked.

The company said it is implementing new controls to help strengthen its arrangements with specialty pharmacies, and that it is "committed to high standards of ethical business conduct."

Specialty pharmacies typically dispense medications that are more costly, or require special handling.

The sector has come under intense scrutiny in recent months, after drug manufacturer Valeant Pharmaceuticals International Inc was forced to sever ties with specialty pharmacy Philidor over questions about Philidor's billing practices and business relationship with Valeant.   Continued...