Novartis kickback program potentially violated the False Claims Act

posted on:
November 10, 2015

author:
Larry Golston

In October 2015, Novartis Pharmaceuticals Corp. announced a $390 million settlement to end alleged violations of the federal False Claims Act (FCA). The FCA lawsuit alleged that Novartis was paying kickbacks to doctors in order to persuade the doctors to prescribe Novartis’ products. The doctors were then reimbursed by federal health care programs like Medicaid and Medicare.

The lawsuit alleged that by tying financial incentives to prescribing drugs, Novartis not only defrauded the government, it also corrupted the judgement of the pharmacist. Because of the kickbacks, doctors were prescribing the Novartis products even though these products were often more expensive and less effective than other rival drugs.

In discussing the Novartis settlement, Stuart F. Delery, now Acting Associate Attorney General of the United States, commented, “Kickback schemes like those alleged in this case not only call into question the integrity of individual medical decisions, but they also raise the cost of health care for all of us. Patients deserve care based on a doctor’s sound medical judgment, not the doctor’s personal financial interest. The Department of Justice will continue to pursue companies that use improper incentives, like those alleged here, to promote their products.”

The FCA includes a qui tam, or whistleblower, provision, which allows private individuals to sue on behalf of the government when the government is the one being defrauded. The allegations in this case include doctor payments that violated the Anti-Kickback Statute, which resulted in the government paying false claims for reimbursement.

The government has prominently shown its desire to combat health care fraud, a fraud that adds incredible cost and detriment to an already burdened system. If you are aware of fraud being committed against the federal or state governments, you could be rewarded for reporting the fraud. Whistleblowers who expose fraud may be eligible for a reward of between 15 to 30 percent of monies recovered by the government.

If you have any questions about whether you qualify as a whistleblower, please contact an attorney at Beasley Allen for a free and confidential evaluation of your claim. There is a contact form on this website, or you may email one of the lawyers on our whistleblower litigation team: Andrew Brashier, Archie Grubb, Larry Golston, or Lance Gould.

Sources:
U.S. Department of Justice
Law 360

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