Pharmaceutical Giant Novartis Facing Lawsuit Over Bribing Doctors to Prescribe Their Drugs

Novartis AG and the Southern District of New York — which oversees Wall Street — are currently engaged in a whistleblower lawsuit. The U.S. alleges the Swiss pharmaceutical company has been wining and dining doctors at phony speaking events as a form of kickback for over a decade.

Last year, Novartis settled a separate suit with the U.S. In that case, filed in 2013, the government accused the company of sending patients to “specialty pharmacies” who, in exchange for rebates, would recommend Novartis drugs to customers.

Then, claimed the government, these specialty pharmacies submitted thousands of what Bloomberg called “fraud-tainted reimbursement claims” to Medicare and Medicaid — to the tune of half a billion dollars.

“Novartis corrupted the prescription drug dispensing process,” said Preet Bharara, U.S. Attorney for Manhattan, in a statement back in 2013. “For its investment, Novartis reaped dramatically increased profits on these drugs, and Medicare, Medicaid and other federal healthcare programs were left holding the bag.”

Between the individual fines on each “fraud-tainted” claim and the state seeking triple damages, the U.S. originally sought $3.3 billion from Novartis. That case settled in November of 2015, with the corporation agreeing to pay $390 million.

But with Manhattan now asking for files on 80,000 events, it seems the U.S. is anything but finished with Novartis.

The government’s motion claims that “the requested documents go to the core issues of this case: whether educational materials were provided at these events; which doctors actually attended the events; how much money was spent on meals and honoraria; and indeed, most fundamentally, whether the underlying documentation shows that a particular event actually took place.”

Novartis claims the government has “exploded” the size of the case by making such a request. Julie Masow, spokeswoman for the corporation, has stated that speaker events are “promotional programs” designed to inform doctors about products and are “an accepted and customary practice” in the pharmaceutical industry.

No doubt.

And if the government’s claims are accurate, then the ongoing battle between the U.S. and Novartis AG is noteworthy for, at minimum, the light it sheds on the kind of behind-the-scenes wheeling and dealing a multinational corporation carries out daily.

11 – April – 2016