Bryan Cohen Jan. 10, 2014, 3:48pm

NEW YORK (Legal Newsline) - New York Attorney General Eric Schneiderman announced a lawsuit on Wednesday against a New Jersey-based pharmaceutical company that allegedly paid kickbacks to a New York pharmaceutical company to increase sales.

Novartis allegedly paid kickbacks to the Elmsford-based BioScrip Inc. to ensure patients continued to take Exjade, an iron reduction drug, for as long as possible. Novartis executives allegedly became concerned Exjade patients were discontinuing the drug because of harmful side effects. BioScrip employees allegedly made calls to thousands of Medicaid recipients encouraging them to refill their prescriptions or resume taking Exjade while downplaying the side effects of the drug.

"When it comes to prescription drugs, New Yorkers and, indeed, all patients have a right to expect unbiased information from their pharmacy," Schneiderman said. "This arrangement between Novartis and BioScrip was dangerous for patients and is against the law. Our lawsuit against Novartis and our agreement with BioScrip send a clear message: Drug companies cannot pay pharmacies to promote drugs directly to patients."

The lawsuit against Novartis is a joint complaint filed with eight other states. The case against Novartis was initiated by a whistleblower.

Schneiderman also announced an agreement in principle with BioScrip to resolve allegations related to the alleged kickback scheme's impact on the state's Medicaid program. Under the terms of the $15 million settlement, BioScrip will pay $895,000 to New York's Medicaid program and cover national costs to Medicaid and Medicare for allegedly excessive Exjade prescriptions.

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