Novartis AG (NOVN) was sued by the U.S., for the second time this week, for allegedly paying kickbacks to increase prescription-drug sales.
Novartis plied physicians with expensive dinners, speaker fees, fishing trips and outings at Hooters restaurants to get them to increase prescriptions of the company’s drugs, the U.S. said in a complaint filed today in Manhattan federal court. Federal health care programs were forced to pay millions of dollars for kickback-tainted claims as a result, the U.S. said.
The government today intervened in a private False Claims Act suit filed in 2011, alleging that the Basel, Switzerland- based drug maker violated the Anti-Kickback Statute to increase sales of two of its hypertension drugs, Lotrel and Valturna, and its diabetes drug Starlix. The suit seeks triple damages and civil penalties.
“Novartis corrupted the prescription drug dispensing process with multimillion-dollar ‘incentive programs’ that targeted doctors who, in exchange for illegal kickbacks, steered patients toward its drugs,” Manhattan U.S. Attorney Preet Bharara said in a statement today. “Novartis reaped dramatically increased profits on these drugs, and Medicare, Medicaid and other federal health-care programs were left holding the bag.”
Julie Masow, a Novartis spokeswoman, said in an e-mail today: “Novartis disputes the USAO’s claims and will defend itself in this litigation.”
On April 23, Bharara’s office sued Novartis for allegedly paying kickbacks, disguised as rebates and discounts, to at least 20 pharmacies for switching patients to its immunosuppressant drug Myfortic.
In September 2010, Novartis agreed to pay $422.5 million to resolve criminal and civil charges that it paid kickbacks and illegally promoted drugs for unapproved uses. As part of the settlement, the company signed a five-year corporate integrity agreement with theDepartment of Health and Human Services, which required reforms including a compliance program relating to promotional activities.
The 80-page agreement provides that Novartis may be barred from participation in federal health care programs, including Medicare and Medicaid, for a “material breach.”
The case is U.S. v. Novartis Pharmaceuticals Corp., 11- cv-00071, U.S. District Court, Southern District of New York (Manhattan).
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