- The Department of Justice (DOJ) wants to fine pharma giant Novartis a stunning $3.35 billion for violating the False Claims Act by using different plans, including rebates, to induce specialty pharmacies to increase prescriptions for the medications Myfortic and Exjade.
- The genesis of this punitive action is a whistleblower lawsuit that was filed in 2011 by David Kester, a former Novartis sales manager.
- There is also a separate whistleblower lawsuit currently in play which was filed by another former Novartis employee, alleging that Novartis paid for lavish trips and expensive dinners in exchange for increased doctor prescriptions of Novartis drugs.
The Justice Department means business.
That's the takeaway message here, especially considering the size of the fine. In fact, the part of the fine that deals with giving specialty pharmacies kickbacks ($1.52 billion) for the Myfortic treatment for kidney transplants and Exjade, which is used for reducing excess iron in patients who undergo blood transfusions, is triple the amount that Medicare and Medicaid paid for the drugs as a result of kickbacks between 2004 and 2013. And then there is the additional $1.83 billion fine in which each of the 166,000 allegedly false claims is attached with a fine of $5,500 to $11,000.
To make matters worse for Novartis, the company has faced a history of these types of missteps, which led the pharma giant to sign on to a Corporate Integrity Agreement (CIA) in 2010. It's possible that the company has violated this agreement, and increasingly, Novartis is being viewed as a "repeat offender."
Worst case scenario? No more government contracts. Best case scenario? Some serious soul-searching and a bigger crackdown on shoddy behavior.