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Pharmaceutical Giant Novartis to Pay Government $729m for Giving Doctors, Patients Kickbacks

— July 3, 2020

One doctor wrote over 9,000 prescriptions for Novartis drugs, and was rewarded with a $320k honorarium.

Pharmaceutical manufacturer Novartis AG will pay more than $729 million to settle federal charges that it bribed doctors to prescribe its drugs.

Of the total settlement amount, Novartis will pay $678 million to resolve claims that it hosted fraudulent educational events. During such events, the Switzerland-based pharmaceutical company would provide physicians with lavish gifts, expensive dinners, and exorbitant speaker fees.

Reuters reports that Novartis will also pay just over $51 million for running a Medicare scam, in which the company funneled money through charitable organizations to cover the cost of patients’ co-pays.

The remaining amount, says Reuters, closes out almost $40 million in forfeitures resultant from Novartis’s violation of an anti-kickback statute, with an additional $48.2 million in recompense set aside for individual states.

“For more than a decade, Novartis spent hundreds of millions of dollars on so-called speaker programs, including speaking fees, exorbitant meals, and top-shelf alcohol that were nothing more than bribes to get doctors across the country to prescribe Novartis’s drugs,” said Audrey Strauss, acting U.S. attorney for Manhattan.

According to the U.S. Department of Justice, Novartis’s educational events also presented an ethical dilemma for physicians in attendance.

Image via (CCA-BY-0.0). Public domain.

One doctor who attended such events, says The New York Times, wrote more than 8,000 prescriptions for Novartis. In exchange, the doctor—who was not named by either Novartis or the Justice Department—received an estimated $320,000 in “honorariums.”

Other physicians—whose prescription-count ranged from 3,600 to over 9,000—also received six-digit compensation in excess of $200,000.

William F. Sweeney, Jr., assistant director of the FBI’s field office in New York, said Novartis used its events to bolster its profit margins and maintain a competitive edge over its rivals.

“Not only did Novartis incentivize doctors to host these speaking events, reps bribed the doctors to write more prescriptions of the company’s drugs to give Novartis an advantage over competitors within their field,” Sweeney, Jr., said in a statement. “Greed replaced the responsibility the public expects from those who practice medicine, not to mention the potential for an erosion of trust in the pharmaceutical industry as a whole. This conduct was reprehensible and dishonest.”

While most members of the public may not have had much faith in the pharmaceutical industry to begin with, Strauss also emphasized the ethical dilemma Novartis’s aggressive—and often generous–campaigning foist upon physicians.

“Giving these cash payments and other lavish goodies interferes with the duty of doctors to choose the best treatment for their patients and increases drug costs for everyone,” Strauss said.

Novartis, adds Reuters, ran speaker programs and promotional events for nearly a decade, between 2002 and 2011, while the company’s Medicare scheme was in place from 2010 to 2014.

The Justice Department estimates that the federal government lost hundreds of dollars to Novartis through prescription payment reimbursements.

In a statement, Novartis CEO Vas Narasimhan said that the company has since reformed.

“Today’s settlements are consistent with Novartis [sic] commitment to resolve and learn from legacy compliance matters,” Narasimhan said.

“We are a different company today, with new leadership, a stronger culture and a more comprehensive commitment to ethics embedded at the heart of our company,” Narasimhan said. “I have been clear that I never want us to achieve commercial success at the expense of our values—our values must always come first and are the foundation of everything we do.”


It Paid Doctors Kickbacks. Now, Novartis Will Pay a $678 Million Settlement.

Novartis pays $729 million to settle U.S. kickback charges

Novartis reaches $678 million settlement of U.S. fraud lawsuit

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