LEGAL NEWSLINE

WASHINGTON -- The U.S. Department of Justice has filed a second lawsuit against Novartis Pharmaceuticals over alleged kickbacks to health care providers.

The complaint seeks damages and civil penalties under the False Claims Act and under the common law for paying kickbacks to doctors to induce them to prescribe Novartis products that were reimbursed by federal health care programs.

"Kickback schemes like those alleged in this case not only call into question the integrity of individual medical decisions, but they also raise the cost of health care for all of us," Stuart F. Delery, Acting Assistant Attorney General for the Civil Division, said in a press release. "Patients deserve care based on a doctor's sound medical judgment, not the doctor's personal financial interest.

"The Department of Justice will continue to pursue companies that use improper incentives, like those alleged here, to promote their products."

"As alleged, Novartis corrupted the prescription drug dispensing process with multi-million dollar 'incentive programs' that targeted doctors who, in exchange for illegal kickbacks, steered patients toward its drugs," U.S. Attorney for the Southern District of New York Preet Bharara said in the release. "And for its investment, Novartis reaped dramatically increased profits on these drugs, and Medicare, Medicaid, and other federal healthcare programs were left holding the bag, doling out millions of dollars in kickback-tainted claims.

"Healthcare fraud imposes tremendous costs and causes great harm to an already burdened healthcare system, and the government will not tolerate it. The widespread kickback fraud alleged in our two lawsuits against Novartis -- which only a few years ago settled a False Claims Act case involving violations of the Anti-Kickback Statute based on illegal payments to doctors -- makes us question whether Novartis is getting the message."

In the complaint, filed in the Southern District of New York, the DOJ claims Novartis "systematically violated the Anti-Kickback Statute," which prohibits the payment of remuneration to induce referrals of items or services covered by Medicare, Medicaid, and other federally-funded programs.

It claims Novartis violated its own internal policies concerning speaker programs, which require that the programs have an educational purpose and that slides about the company's drugs be presented. Novartis violated the Anti-Kickback Statute by paying doctors to speak about certain drugs, including its hypertension drugs Lotrel and Valturna and its diabetes drug Starlix, at events that were often little or nothing more than social occasions for the doctors. The payments and lavish dinners given to the doctors were, in reality, kickbacks to the speakers and attendees to induce them to write prescriptions for Novartis drugs.

The DOJ says that, in many instances, Novartis made payments to doctors for purported speaker programs that either did not occur at all or that had few or no attendees, and thousands of programs were held all over the country at which few or no slides were shown and the doctors who participated spent little or no time discussing the drug at issue.

As a result of its actions, Novartis caused the submission of numerous false claims for drugs to federal health care programs, including Medicare, Medicaid, TRICARE and the Department of Veterans Affairs health care program, resulting in millions of dollars in reimbursements, according to the DOJ.

The complaint seeks damages and penalties under the False Claims Act for the false claims for reimbursement for Lotrel, Valturna, and Stalix, as well as for other Novartis cardiovascular drugs. In addition, the United States seeks damages under the common law.

The complaint was filed in a lawsuit brought under the qui tam, or whistleblower, provisions of the False Claims Act by Oswald Bilotta, a former Novartis sales representative. Under the Act'squi tam provisions, a private citizen, known as a "relator," can sue on behalf of the United States and share in any recovery. The United States may join the lawsuit, which it did.