Novartis has agreed to pay $390 million in fines to settle claims from the US Justice Department that the drugmaker provided kickbacks to specialty pharmacies in exchange for inducing patients to refill prescriptions on its products. In the case, the US federal government and more than 40 states accused Novartis of making payments to pharmacies between 2007 and 2012 to entice them to recommend prescriptions to Medicaid and Medicare recipients. US Attorney Preet Bharara remarked "Novartis turned pharmacies that should have been disinterested healthcare providers into a biased salesforce for the drugmaker."
The US government noted that Novartis admitted to a series of wrongdoings as part of the previously announced settlement. Specifically, prosecutors claimed that Novartis selected a series of pharmacies to join a closed distribution network called EPASS that was used to fill prescriptions. The pharmacies were then urged to entice patients to continue taking their drugs, while the risks and side effects of the therapies were downplayed. The government also indicated that Novartis ran a contest and maintained "score cards" on which pharmacies kept patients on particular drugs for the longest period of time.
Earlier this year, the Justice Department filed a lawsuit seeking as much as $3.35 billion in damages in fines from Novartis over allegations that the drugmaker created kickback schemes to increase sales of the iron chelation therapy Exjade (deferasirox) and the kidney transplant drug Myfortic (mycophenolic acid). The company stated that it is implementing new controls to improve its arrangements with specialty pharmacies, adding that it remains "committed to high standards of ethical business conduct."
The settlement comes after Valeant Pharmaceuticals was accused last month of using specialty pharmacy Philidor to record phantom drug sales. Valeant, which denied the allegations, disclosed that it was creating a panel to investigate the claims, while the drugmaker later moved to end its relationship with Philidor.
