Has Novartis Infringe on its Corporate Integrity Agreement?

The US Department of Justice filed two lawsuits in the span of one week against Novartis for alleged paid kickbacks to improve prescriptions and caused federal healthcare programs to pay for medicines based on false claims. A complaint filed seeks damages and other civil penalties for corrupting the dispensing process with incentive programs worth several millions of dollars that were aims at doctors. The Department of Justice also claimed that Novartis gave kickbacks in form of rebates and discounts to pharmacies in exchange for switching transplant patients to its Myfortic immunosuppressant treatment. Novartis

The feds have made similar claims against various drug manufacturers over the past decade. Expensive dinners and payments were given to doctors were alleged kickback to attendees and speakers to make them to prescribe various Novartis drugs. The feds said that some programs never occurred. Instead presentations were made on Hooters restaurants or during fishing trips off the Florida coast.

Novartis often treated doctors to costly dinners at high-end restaurants. For instance, a dinner for three at a Washington, DC restaurant cost $2,016 or $672 each. The company also paid a $1,000 honorarium to a speaker for the program. The lawsuit filed the by Justice Department claimed that the return on the investment made by the pharmaceutical company was worth it.

The US Attorney pointed out that Novartis is a repeat offender. Three years ago, the company paid $422.5 million in penalties and pleaded guilty to a misdemeanor to settle criminal allegations for improperly promoting its epilepsy drug and other meds. As a result, the company was made to sign a Corporate Integrity Agreement that required establishing an internal compliance program and report violations. The agreement was signed September 2010 and yet the two lawsuits claimed infractions made after the date.

Even after signing the corporate integrity agreement, Novartis failed to prevent kickbacks from being given as part of its speaker programs. The company could face exclusion, which could amount to a huge penalty as well as lessen its leverage in any settlement deals.

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