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Novartis hit by kickback lawsuits in US

Company accused of paying millions of dollars to doctors in exchange for prescribing drugs

Novartis hit by kickback lawsuits in US

Novartis' marketing practices are in the firing line in the US, with two federal lawsuits filed in the last few days alleging payments worth millions of dollars in inducements to healthcare providers.

The whistleblower cases focus on activities related to Novartis' immunosuppressant product Myfortic (mycophenolate), antihypertensives Lotrel (almodipine and benazepril) and Valturna (aliskiren and valsartan), and the diabetes treatment Starlix (nateglinide).

The allegations filed by the US Department of Justice (DoJ), which cover a 10-year period, allege that the pharma company paid kickbacks to doctors to induce them to prescribe "Novartis pharmaceutical products that were reimbursed by federal healthcare programmes".

The DoJ suggests that Novartis "systematically violated the anti-kickback statute" between 2001 and 2011 by paying doctors to speak about a number of drugs including Lotrel, Valturna and Starlix, sometimes "held in circumstances in which it would have been virtually impossible for any presentation to be made, such as on fishing trips off the Florida coast".

Other Novartis events were held at Hooters restaurants, and the DoJ also cites two instances in which the price tag for speaker meals came to $3,000 for two people and more than $2,000 for three people.

An earlier DoJ lawsuit claimed the pharma company provided kickbacks to at least 20 pharmacies that switched kidney transplant recipients to Myfortic. The practice caused pharmacies to submit claims to federal healthcare programmes that resulted in "tens of millions of dollars" in reimbursement, according to the federal authorities.

Novartis has responded by saying that it believes the allegations that its speaker programmes lacked legitimate business purpose are without merit, and that it disputes the Myfortic claims.

"Physician speaker programmes are … designed to inform physicians about the appropriate use of medicines and Novartis US subsidiary has numerous controls in place to help ensure they are conducted in a compliant fashion," it said.

"These programmes are an accepted and customary practice in the industry, "added the pharma company.

This is not the first time that Novartis' practices have been under scrutiny in the US. In September 2010, the company signed up to a rigorous compliance programme after paying $422m to settle allegations that it marketed the epilepsy drug Trileptal (oxcarbazepine) and five other drugs for unauthorised use in the USA.

The DoJ also contends that the drugmaker is not keeping to the promises it made in the compliance programme, which has failed to prevent kickbacks being paid. Where abuses were reported to the company - infringers were let off with "a slap on the wrist", it says.

Andre Wyss, president of Novartis' US operations, disagreed, claiming "[w]e stand behind our compliance programme".

He added that the company "invests significant time and resources to help ensure we conduct our business in an ethical and responsible manner".

29th April 2013

From: Sales, Regulatory

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