New Kickback Lawsuit Brought Against Novartis


A kickback by any other name is still a kickback. Novartis Pharmaceuticals Corp. has already paid the price for allegedly giving kickbacks but it allegedly appears not to have learned its lesson yet. After having settled fraud charges based on kickbacks less than three years ago, Novartis is now facing another lawsuit from the government for allegedly giving kickbacks to pharmacies that transferred kidney transplant patients from competitors’ drugs to its own.

The civil health care fraud lawsuit was filed in the U.S. District Court in Manhattan and it seeks unspecified damages and civil penalties. According to the lawsuit, the kickback scheme goes back as far as 2005.

U.S. Attorney Preet Bharara said the company allegedly used the “lure of kickbacks disguised as rebates” to turn at least 20 pharmacies into a sales force for its own drug, Myfortic. According to the lawsuit, this illegal behavior cost the public tens of millions of dollars in drugs dispensed by pharmacists who had accepted Novartis’s kickbacks in exchange for selling the more expensive drugs.

Novartis’s system allegedly opposed the use of a cheaper, generic immunosuppressant drug. The lawsuit claims that the pharmaceutical company found that it was highly profitable to pay pharmacies kickbacks of up to as much as 10 or even 20 percent in exchange for switching patients to Myfortic.

According to the lawsuit, Novartis offered one Los Angeles pharmacist a “bonus” rebate of several hundred thousand dollars in order to get the pharmacist to “shoulder the burden” of switching between 700 and 1,000 transplant patients to Myfortic.

The arrangement violates the federal anti-kickback statute which prohibits the offer or payment of rebates and other inducements for the purchase of drugs or services covered by Medicare, Medicaid or other health program.

Novartis denies the claims and said in a statement that it will defend itself. It said that the investigation into the pharmaceutical company’s interactions with specialty pharmacies relating to the handling of Myfortic had been previously disclosed.

The company said, “As a leading healthcare company, Novartis strives to achieve high performance with high integrity. [Novartis Pharmaceuticals Corp.] is committed to high standards of ethical business conduct and regulatory compliance in the sale and marketing of our products.”

The consumer and tax payer rights law firm of Lubin Austermuehle represents whistleblowers who are pursing qui tam lawsuits at any level of government or for violations of the securities laws and IRS code, including claims under the Illinois Whistleblower Act, the Chicago whistleblower ordinance, the Dodd-Frank Act and the federal False Claims Act. Based in Chicago and Oak Brook, Ill., our Naperville and Lake Forest area qui tam and False Claims Act lawyers stand ready to represent whistleblowers throughout the United States — regardless of whether prosecutors have decided to join the lawsuit. If you know about fraud against a government agency and you’re ready to speak up, you can learn more about whistleblower lawsuits at a free, confidential consultation. To set one up, please contact Lubin Austermuehle online or call 630-333-0333 today.

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