Health Care

Novartis agrees to pay $729M to settle kickback lawsuit

Novartis’ campus in Basel, Switzerland

Swiss drugmaker Novartis has agreed to pay more than $729 million to settle a lawsuit filed in relation to an alleged kickback scheme.

The Basel, Switzerland-based company said Thursday that it would pay $678 million in relation to speaker programs and promotional events that took place between 2002 and 2011 and an additional $51.25 million related to support for charitable co-pay foundations between 2010 and 2014. The settlement agreement was made with the U.S. Attorney’s Office for the Southern District of New York, New York state’s attorney general and former Novartis sales representative Oswald Bilotta. The company also agreed to new corporate integrity obligations with the Department of Health and Human Services’ Office of the Inspector General, which it said would change how it delivers peer-to-peer medical education programs.

“Today’s settlements are consistent with Novartis’ commitment to resolve and learn from legacy compliance matters,” CEO Vas Narasimhan said in a statement. “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. 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.”

Bilotta originally filed the whistleblower suit against Novartis in 2011, and the district attorney and New York state attorney general intervened in 2013. The company was accused of paying kickbacks to doctors in order to prescribe its drugs, including speaking fees for supposed educational events.

Novartis’ announcement comes less than a week after the U.S. district attorney for Massachusetts filed suit against Tarrytown, New York-based Regeneron Pharmaceuticals. That suit alleges that the drugmaker paid tens of millions of dollars worth of kickbacks through a copay foundation in relation to Eylea (aflibercept). Regeneron is one of several companies that have received subpoenas alleging similar schemes in 2017 and has said that it will mount a “vigorous” defense against the allegations.

Photo: Novartis

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