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Late last week the United States government confirmed that it would be joining a second civil fraud lawsuit against Novartis, Swiss drug maker for paying doctors and pharmacists in exchange for prescribing its own drugs.

By Lucy Brake on Apr 29, 2013

This is the second lawsuit which is focused on accusing part of Novartisof paying out inducements worth many millions of dollars to general practitioners, pharmacists and other healthcare professionals in return for prescribing Novartis pharmaceuticals.

The US federal government has now joined a whistle-blower lawsuit which was first filed against Novartis Pharmaceuticals by a former sales representative Oswald Bilotta back in January 2011.

The New York Times reported that US authorities had observed for ten years how the company had “lavished healthy speaking fees and opulent meals” on healthcare professionals, including one dinner for three at the restaurant Nobu which cost nearly US$10,000, to “induce doctors to prescribe its drugs”.

As a result, the US Medicare and Medicaid programmes ended up paying out millions of dollars in reimbursements based on kickback-tainted claims for pharmaceuticals such as Lotrel, Valturna and Starlix.

Preet Bharara, the Manhattan US Attorney, said in a public statement that Novartis “corrupted the prescription drug dispensing process”. He observed that as a return for the company’s investment, Novartis enjoyed significantly increased profits on particular medicines and that the US government were left with covering the cost.

Earlier last week, reported Fox Business, the US government accused the company of encouraging pharmacies to switch thousands of patients to its own immunosuppressant drug Myfortic in exchange for rebates and discounts.

Reuters reported that Novartis disputes the claims in both lawsuits and would defend itself against them. Julie Masow, a Novartis spokeswoman, said speaker programmes were promotional programmes designed to keep physicians updated on the company’s medicines were best used. She said that the company “invests significant time and resources to help ensure these programs are conducted in an ethical and responsible manner”.

Twenty-seven states, the District of Columbia and Chicago and New York are also plaintiffs in the lawsuit, which seeks triple damages under the federal False Claims Act.

The Business Standard noted that people who file whistle blower cases on behalf of the government under the False Claims Act are able to share in any damage recoveries. The United States does not automatically participate in such lawsuits, but often joins cases it believes have greater merit, such as the Novartis suit.