In a statement, the U.S. Department of Justice said, Novartis AG has agreed to settle U.S. government charges that it had made illegal transfers, in the nature of kickbacks, to doctors and patients, in order to boost drug sales.
Swiss drugmaker Novartis AG has agreed to pay $720 million, of which $678 million will be paid to resolve claims that it organized tens of thousands of sham educational events where it lavished doctors with exorbitant speaker fees, expensive dinners and alcohol to induce them to prescribe its cardiovascular and diabetes drugs; it will also pay $51.25 million to resolve charges that it funneled money through three charitable foundations to cover co-payments of Medicare patients so they would purchase its drugs.
Both settlements resolved civil charges that Novartis violated the federal False Claims Act.
Acting U.S. Attorney Audrey Strauss has called these incentives to doctors “nothing more than bribes,” saying federal healthcare programs paid hundreds of millions of dollars in reimbursements for prescriptions tainted by kickbacks. “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”.
The speaker programs and other promotional events occurred from 2002 to 2011 while the co-payments were made between 2010 to 2014, said the Justice Department.
Along with the settlements, Novartis has agreed to curtail its speaker programs and enter a five-year corporate integrity agreement.
“We are a different company today with new leadership, a stronger culture and a more comprehensive commitment to ethics,” said Novartis CEO Vas Narasimhan in a statement.