July 1, 2015
By
Mark Terry
, BioSpace.com Breaking News Staff
The U.S. government
filed a lawsuit
in Manhattan federal court yesterday against Swiss company
Novartis AG
. The U.S. is demanding up to $3.35 billion in damages and civil fines over alleged violations of the federal
False Claims Act
.
The
case alleges
that
Novartis
filed improper reimbursement claims for Exjade, which is used to treat patients receiving blood transfusions, and Myfortic, for kidney transplant patients. Between 2004 and 2013, the government alleges Novartis submitted 166,031 false claims.
The case seeks $1.52 billion in damages, which is approximately three times the amount reimbursed. The government is also seeking $1.83 billion in fines, equivalent to $5,500 to $11,000 per alleged false claim.
According to
Novartis
spokeswoman
Julie Masow
, speaking to
Reuters
, the company “continues to dispute the allegations and is continuing to defend itself in this litigation. We look forward to a full presentation of all of the evidence during the trial.”
A jury trial is schedule to start Nov. 2, 2015 unless the accusations are settled before then. The lawsuit is being brought by the federal government, 11 U.S. states, and
David Kester
, a former
Novartis
respiratory account manager and whistleblower acting on behalf of 17 other states.
According to case documents, plaintiffs allege that Novartis referred patients taking Exjade to three specialty pharmacies,
Accredo
,
BioScrip
and
U.S. Bioservices
, “and offered and paid so-called rebates to those pharmacies with a purpose of inducing the pharmacies to recommend to patients that they order Exjade refills.”
In terms of Myfortic, the case alleges that
Novartis
“offered and paid five specialty pharmacies (
Kilgore’s
,
Bryant’s
,
Baylor
,
Twenty Ten
, and
Transcript
) kickbacks in the form of so-called performance rebates with a purpose of inducing those pharmacies to recommend Myfortic over a competitor drug called CellCept and over generic versions of CellCept.” CellCept is manufactured by
Genentech
.
In January of last year,
BioScrip Inc.
, which was tangled up in the original lawsuits with
Novartis
,
agreed to pay
$15 million to exist the
False Claims Act
whistleblower lawsuit. It also agreed to pay $3.3 million with interest to the states involved.
Express Scripts also agreed
to pay $60 million to settle the allegations.
Accredo Health Group
is a specialty pharmacy run by
Express Scripts Inc.
.
According to
Novartis
documents, about 40 percent of Exjade sales were reimbursed by
Medicaid
,
Medicare
or other government-run health programs.
The U.S. federal government
also filed a suit
against
Novartis
in April 2013 for alleged kickbacks and violations of the
False Claims Act
. This case involved
Novartis
paying physicians to talk about cardiovascular drugs Lotrel and Valturna, and its diabetes drug Starlix, in exchange for payments, dinners and other financial incentives. The suit alleged that “
Novartis
simply wined and dined the doctors at high-end restaurants with astronomical costs, as well as in sports bars, on fishing trips, and at other venues not conducive to an educational program.”
Writing in
The Wall Street Journal
Ed Silverman
notes that, because
Novartis
signed a
Corporate Integrity Agreement
in 2010, which typically run five years, and “require a company to establish an internal compliance program and report violations.” In theory, if Novartis loses the current case and it is proven that these incidents occurred after the signing of the agreement, one penalty could be exclusion from contracts with federal health care programs.
Silverman points out, however, that the government tends to approach exclusion carefully because it doesn’t want to prevent patients from receiving important medications. The fact that the court records only mention fines and charges is probably an indication that exclusion is not on the table.
After Bristol-Myers Squibb Wonder Drug Meets Endpoints, Will FDA Process Be Up to Snuff?
Our
most popular story last week
was about a new wonder drug that wowed the
FDA
. An experimental anticoagulant drug under joint development between
Portola Pharmaceuticals, Inc.
,
Bristol-Myers Squibb Company
and
Pfizer Inc.
met all primary and secondary endpoints in a Phase III study determining safety and efficacy—and our readers responded. The hope now is it will be sped to patients as fast as possible.
That’s lead
BioSpace
to ask, what do you think about the drug approval process in this country? Let us know your ideas.
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