Novartis to pay $678 mn as settlement in kickback case
Novartis Pharmaceuticals Corp. agreed to pay $678 million to resolve a whistle-blower case accusing the drugmaker of paying kickbacks to thousands of doctors who prescribed its medicines and wooing them with lavish dinners and trips to Hooters, ending almost a decade of litigation.The US sued the Swiss drugmaker in 2013, joining in a case filed two years earlier by a former sales representative who accused the company of using its speakers’ programs to bribe doctors to write prescriptions for its products.
Novartis paid “exorbitant speaker fees to doctors who gave no meaningful presentations, and provided expensive meals and alcohol to doctor attendees and their guests,” federal prosecutors in Manhattan said in a statement Wednesday.
The case had been set to go to trial last year before being delayed to allow settlement talks to play out.As part of the accord, Novartis will change how the company markets its drugs to doctors as part of a so-called “corporate integrity agreement,” the drugmaker said in a statement.
The deal also resolved claims by the New York Attorney General’s Office over the kickbacks, designed to boost sales of the company’s cardiovascular and diabetes drugs reimbursed by federal health-care programs. Novartis shares rose less than 1% to 83.26 Swiss francs in Zurich trading Thursday.
In a separate settlement, Novartis agreed to pay more than $51 million to end claims by prosecutors in Boston that it violated federal law by paying the Medicare co-pays for its own drugs to get patients covered by federal insurance programs to buy their drugs.
“Today’s settlements are consistent with Novartis’ commitment to resolve and learn from legacy compliance matters,” Vas Narasimhan, the company’s chief executive officer, said in the statement. “We are a different company today—with new leadership, a stronger culture, and a more comprehensive commitment to ethics embedded at the heart of our company.”
The company announced June 25 it would pay about $347 million to resolve claims its units in Greece and Vietnam bribed doctors and hospitals to prescribe its products and created false records to cover the bribes.
In 2015, the company also paid $390 million to resolve federal prosecutors’ claims it gave kickbacks to US specialty pharmacies in order to increase sales of its Exjade and Myfortic drugs.
In the New York case, Novartis faced accusations it bribed thousands of doctors with sham speaking fees, fishing trips, dinners at high-end eateries, and even outings at Hooters restaurants to boost sales of hypertension drugs Lotrel and Valturna, along with the diabetes medication Starlix.
The US had once sought as much as $2 billion in damages, Bloomberg Intelligence analyst Holly Froum has estimated.