Swiss Pharma Company Headed for Trial in Kickback Case

By William Vogeler, Esq. on April 09, 2019

Novartis, the Swiss pharmaceutical company, has been in trouble for some time. First, there was the $442 million payout to settle various civil and criminal cases for allegedly "mishandling" a drug. Then there was another $390 million settlement for reportedly "paying rebates" to pharmacies to promote its drugs.

Now Novartis is facing a trial on claims the company kicked back millions of dollars to doctors in exchange for prescribing its drugs.

Three out of four doctors say it will settle.

'Kickback Scheme'

Lawyers for the company thought they had a winner when they filed a motion for summary judgment. They argued that there was no "quid pro quo between physicians and Novartis." In United States v. Novartis Pharmaceuticals Corporation, the judge said that didn't matter. The government had enough evidence of a "company-wide kickback scheme," said Judge Paul G. Gardephe.

According to the complaint, Novartis engaged in a decade-long scheme by paying physicians for "educational promotional programs." It was intended to induce doctors to prescribe Novartis drugs, the government contends. Novartis allegedly gave doctors speaking fees to appear at their own offices, and paid for lavish meals at "lunch-n-learn" events. One dinner-for-three, for example, cost $9,750, the plaintiffs said.

They contend the scheme violated the Anti-Kickback Statute and the False Claims Act. The defendant thinks the government won't be able to prove it.

Ready for Trial

Novartis spokesman Eric Althoof suggested the company is ready for trial. "We are disappointed in today's decision and look forward to presenting our case at trial," he told Reuters. "We continue to believe that the government has insufficient evidence to support its claims."

Those are fighting words, but they didn't convince the judge. He granted the plaintiff's cross-motion for partial summary judgment.

Gardephe said the government may introduce evidence at trial that the promotional events lacked a "medical education purpose." That includes "lunch-n-learn" claims unless, of course, the case settles.

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