Novartis agrees to US$642 mil settlement over kickbacks to doctors

WASHINGTON: Swiss pharmaceutical giant Novartis has agreed to pay more than US$642 million to settle a lawsuit that accused it of paying kickbacks to doctors, among other allegations, the US Department of Justice said.

Part of the settlement was related to the company’s use of three foundations to funnel payments to cover costs for patients taking its multiple sclerosis drug Gilenya and kidney cancer drug Afinitor.

Another part centred on alleged bribing of doctors to prescribe the company’s medication.

“Through this settlement and others, the government has demonstrated its commitment to ensuring that drug companies do not use kickbacks to influence the drugs prescribed by doctors or purchased by patients,” Assistant Attorney General Jody Hunt said Wednesday.

Novartis is accused of having hosted tens of thousands of speaker programmes and events which the Department of Justice said were used to bribe physicians.

In one example, the company chose doctors who already prescribed high volumes of Novartis drugs to serve as paid speakers, as a means of inducing them to continue writing or write more prescriptions.

Representatives often dropped doctors from the speaker programme if they failed to increase prescriptions, the Department of Justice said.

“For more than a decade, Novartis spent hundreds of millions of dollars on so-called speaker programmes, including speaking fees, exorbitant meals and top-shelf alcohol that were nothing more than bribes to get doctors across the country to prescribe Novartis’ drugs,” said acting US Attorney Audrey Strauss for the Southern District of New York.

The Department of Justice said the activity was the result of decisions made by top management at Novartis’ North American headquarters in New Jersey.

Under the settlement, Novartis will participate in a five-year corporate integrity agreement with the Department of Health and Human Services to address company conduct.

The company’s CEO Vas Narasimhan described the settlement as “an important milestone on our journey to build trust with society”.

“Today’s settlements are consistent with Novartis commitment to resolve and learn from legacy compliance matters,” he said in a statement.

“We are a different company today — with new leadership, a stronger culture, and a more comprehensive commitment to ethics embedded at the heart of our company.”