Drug Maker, Novartis, Accused Again of Kickback Schemes

We have long noted that the financial relationships between the drug and the health care industries have led to enormous controversy. Critics maintain that such relationships create conflicts of interest and could unduly influence everything from research findings to prescribing practices, with patients no longer the primary focus in health care decisions.

In another situation involving questionable ethical practices and potential kickback violations seen in the healthcare community, two federal lawsuits are charging drug maker, Novartis Pharmaceuticals, with fraudulently promoting drug sales and throwing in kickbacks, says The New York Times. A few years ago, the Times points out, Novartis settled both criminal and civil investigations into if it had illegally touted medications for off-label uses to health care professionals.

While it is legal for doctors to prescribe drugs for uses not approved by the U.S. Food and Drug Administration (FDA), it is illegal for drug makers to market a medication for any use that is not FDA approved.

Novartis was accused of giving doctors illegal kickbacks for seats on advisory boards, speaking engagements, and entertainment and travel expenses. The drug maker settled for $422.5 million, signing a “corporate integrity agreement,” to ensure its promotions would be in compliance with a federal anti-kickback statute, the Times pointed out.

Novartis is again being accused of providing more kickbacks, this time to pharmacies, to increase sales of one of its top sellers, the drug, Myfortic, an immune suppressant used to help prevent kidney transplant rejections, explained the Times. Preet Bharara, United States attorney for the Southern District of New York, just announced that a lawsuit on the matter has been filed that charges Novartis with providing illegal rebates and discounts to at least 20 “influential” pharmacies based on those firms successfully prompted facilities and physicians to switch patients to Myfortic, said the Times. The U.S. attorney is seeking damages equal to three times the tens of millions of dollars Medicare and Medicaid paid in Myfortic claims involved in the kickback scheme; prosecutors seek an additional $11,000 penalty per prescription and refill for each patient switched to Myfortic, according to the Times.

A second lawsuit was filed by the same federal prosecutors charging that Novartis Pharmaceuticals made illegal payments, via honorariums and other benefits, to physicians so that they would be persuaded to write prescriptions for other Novartis drugs, said the Times, which appears to be in stark contrast to the commitment made in its settlement agreement three years ago.

While these two lawsuits involved Novartis Pharmaceuticals, the American subsidiary of the Swiss-based multinational corporation, we previously wrote that, U.S. prosecutors were investigating Novartis for its marketing of products including hypertension drug Tekturna. In a recent regulatory filing, Swiss-based Novartis revealed that, last year, a U.S. unit of the company received a subpoena from federal prosecutors in Louisville, Kentucky, seeking documents on sales practices, including payments to health-care providers, for Tekturna and other medicines, Bloomberg News reported.

Novartis also reported investigations of its interactions with specialty pharmaceuticals involving its cancer medicine Gleevec and, Gilenya, a multiple sclerosis medication. The company disclosed that U.S. prosecutors are investigating the Alcon eye-care unit over the export of products to Iran and other countries subject to trade sanctions.

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