Novartis Pharmaceuticals Facing Healthcare Fraud Claims

As we have discussed in previous posts, the U.S. government has taken a hardline approach against unlawful kickback schemes within the healthcare industry. The government continues to prosecute companies found to be engaging in these schemes and continually reiterates its position that “[i]nvestigations such as these are a high priority for the FBI and we will aggressively pursue providers that boost their profits at the expense of Medicare and other government programs.”

In a newly-filed case against pharmaceutical company Novartis Pharmaceuticals, the U.S. government and several state governments are alleging a kickback scheme that not only compromises the integrity of the Medicare and Medicaid billing system, but places patients in danger of exposure to dangerous and life-threatening side effects. In sum, the allegations against Novartis reach beyond mere financial dishonesty and touch upon the true victims of pharmaceutical kickback schemes: uninformed patients.

Details of Allegations Against Novartis

Novartis Pharmaceuticals produces, among many other drugs, two products known as Exjade and Myfortic. The former is a drug intended to treat the blood for iron toxicity while the latter is used as an anti-rejection drug for transplant patients. In the most recent filing, submitted by the District of New York earlier this month, Novartis was allegedly enticing pharmacy employees to encourage patients to try these drugs and offering kickbacks to pharmacy companies for encouraging refills of both Exjade and Myfortic.

More specifically, allegations reveal that Novartis allowed pharmacies such as BioScrip to promote refills of these drugs under the guise of offering patient counseling and education. As stated by U.S. Attorney Preet Bharara for the District of New York, “Novartis is caught having orchestrated yet another scheme whereby it used the lure of kickbacks to co-opt a healthcare providers’ independence and, in this case, turned pharmacy employees at BioScrip into salespeople for Exjade….patients received one-sided advice that did not discuss Exjade’s serious, potentially life-threatening, side effects.”

With regard to the anti-rejection drug Myfortic, allegations reveal that Novartis was offering pharmacies “performance rebates” for influencing transplant patients to switch to this drug. More specifically, one pharmacy in the Los Angeles area stated that it agreed to convert as many patients as Novartis requested in exchange for a 5 percent rebate. Alarmingly, these recommendations were presented as unbiased, professional opinions, despite having no patient records or medical background information from a physician to back the endorsement for that particular patient.

False Claims

The unlawful nature of this exchange occurs when pharmacies attempt to invoice federal healthcare programs like Medicare and Medicaid for the cost of these “kickback-tainted” drugs. To date, the government has expended tens of millions of dollars to cover prescription drugs that likely should not have been recommended in the first place. Slowly, BioScrip and Novaris continue to settle claims with the federal government and several states.

Contact a Whistleblower Attorney

If you suspect misconduct similar to that explained above at your pharmacy or physician’s office, we encourage you to contact a whistleblower attorney right away. Under the False Claims Act, whistleblowers can receive up to 30 percent of any amount recovered by federal and state governments.