Federal Lawsuit: Novartis Kickback Scheme Paid Doctors to Prescribe Its Drugs

Court documents in a federal lawsuit allege that between 2001 and 2011, Novartis Pharmaceuticals engaged in a huge kickback scheme to induce nearly 27,000 doctors to prescribe Novartis drugs.  The doctors received money, free meals, travel, and entertainment.

The federal Anti-Kickback Statute makes it illegal for a drug company to pay doctors to write prescriptions for drugs reimbursed by federal health care programs. Long Island Newsday reports that Novartis’s $65-million kickback scheme was designed to get doctors to prescribe Novartis drugs including the diabetes medication Starlix (neteglinide), a diabetes medication, and Lotrel (amlodipine and benazepril) and Valturna (aliskiren and valsartan), hypertension drugs. U.S. Attorney Preet Bharara filed suit against Novartis in 2013. “Novartis corrupted the prescription drug dispensing process with multimillion-dollar ‘incentive’ programs that targeted doctors who, in exchange for illegal kickbacks, steered patients toward its drugs,” Bharara said.

New York State filed a separate lawsuit. Attorney General Eric T. Schneiderman estimated that nearly 5,000 New York doctors accepted money, free meals, or entertainment from Novartis.  The suit claims that these inducements cost the state’s Medicaid program more than $34 million in reimbursements for prescriptions written by doctors who took part in the drug maker’s speakers program.

According to prosecutors, Novartis sales representatives recruited doctors to give paid “informational” speeches about the company’s drugs, but the payments were actually to induce the doctors to increase their prescriptions for Novartis drugs, according to Newsday. One Long Island doctor acknowledged accepting about $60,000 in speaker’s fees from drug makers, including Novartis, over a two-year period before he stopped giving such speeches. Speakers were paid from $500 and $3,000 per speech, and some doctors who simply attended events received payments. Doctors who gave out-of-town speeches also received airfare, meals, and lodging. Some company-sponsored events were social events, with no speeches or presentations.

Newsday explains that sales reps were able to track doctors’ prescription practices through prescription records obtained from pharmacies. Health information organizations can legally purchase such records and can collect anonymous information about medical records from insurance companies.

Valturna was pulled off the market in 2012 after some patients developed kidney problems, low blood pressure, and other side effects, Newsday reports. The Food and Drug Administration (FDA) warned that people with diabetes should not use the drug.