Feds accuse Novartis of paying docs kickbacks

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The U.S. Attorney’s Office charged Novartis Pharmaceuticals with violating the False Claims Act for allegedly paying physicians kickbacks to induce them to prescribe two cardiovascular drugs and one diabetes treatment. The court filing included examples of meals that cost more than $1,000 a person and a $1,500 honorarium for a talk that never happened.

The federal government claims that between January 2002 and November 2011, Novartis paid physicians to speak about the hypertension drugs Lotrel and Valturna and the diabetes drug Starlix at dinners “that were often little or nothing more than social occasions for the doctors.” It argued that Novartis knew the practice led to submission of prescriptions of its drugs that were then reimbursed through Medicare and other federal programs.

It noted that Novartis had made a settlement in 2010 with the Department of Justice over false claims lawsuits that involved its speakers program “and was well aware that its speaker programs created opportunities to provide kickbacks to doctors.”  

In a release, Novartis countered that the charges are related to what was previously disclosed and that the current allegations “are without merit.” The company stated that speakers programs are accepted practice and that it had internal checks to ensure compliance.

In the current lawsuit, federal prosecutors claim that the payments and dinners were kickbacks to speakers who were supposed to present talks that included slide presentations and a discussion of the drug but often instead were cursory, non-educational codas to dinners at high-end restaurants, sports bars and even fishing trips. Citing specific examples, the court document listed a dinner at Fleming’s Prime Steakhouse and Wine bar in West Des Moines with a tab of $1,042 per guest and a canceled presentation in Toms River, N.J., in which the speaker received $1.500.

“Novartis caused many thousands of prescriptions to be written as a result of speaker programs that were kickbacks to doctors,” according to court documents. “Novartis paid 26,997 doctors kickbacks in the form of honoraria and/or exorbitant meals and entertainment in conjunction with speaker programs on Lotrel, Valturna, and Starlix during the period from January 2002 through November 2011. On average each of these doctors wrote many thousands of dollars’ worth of prescriptions for Lotrel, Valturna, and Starlix that were reimbursed or purchased by federal health care programs.”

The court filing charges Novartis with two counts of fraud under the False Claims Act and one count of unjust enrichment. If found guilty, Basel, Switzerland-based Novartis faces paying fees that could total three times the damages and civil penalties in the first two charges and damages in the third count.

The whistleblower case was filed April 26 in the U.S. District Court of the District of Southern New York.