Novartis Accused of Paying Kickbacks to Boost Exjade Sales

Novartis Accused of Paying Kickbacks to Boost Exjade Sales
By Christie Smythe
Bloomberg Business Week
January 08, 2014

A Novartis AG (NOVN) unit was accused by the U.S. and a group of states of paying kickbacks to a specialty pharmacy to boost sales of Exjade, an iron-control drug that can cause kidney and liver failure.

U.S. District Judge Colleen McMahon in Manhattan today unsealed a complaint filed against Novartis Pharmaceuticals Corp. by the U.S., 26 states and the District of Columbia alleging that the drugmaker had paid kickbacks to BioScrip Inc. (BIOS:US) to encourage patients to refill prescriptions.

Separately, federal and state officials announced that the Elmsford, New York-based specialty pharmacy agreed to pay $15 million to resolve the claims against it.

Federal and state officials alleged that government health programs Medicare and Medicaid paid tens of millions of dollars in reimbursements based on false claims for the drug.

“This arrangement between Novartis and BioScrip was dangerous for patients and is against the law,” New York Attorney General Eric Schneiderman said in a statement. “Our lawsuit against Novartis and our agreement with BioScrip send a clear message: Drug companies cannot pay pharmacies to promote drugs directly to patients.”

Kickbacks, Calls

According to the complaint, Novartis paid kickbacks to BioScrip from February 2007 to May 2012 in the form of patient referrals and rebates. To hold up its end of the bargain, BioScrip made tens of thousands of calls to patients to try to convince them to keep taking the drug, federal and state officials alleged.

Julie Masow, a spokeswoman for Basel, Switzerland-based Novartis, said in an e-mailed statement that the company disputes the allegations in the complaint related to its interactions with BioScrip and intends to defend itself.

The company “is dedicated to improving patient health and supports patient medication adherence programs,” including outreach by pharmacies, Masow said.

Exjade was approved by the U.S. Food and Drug Administration in November 2005 to treat chronic iron overload due to blood transfusions, according to the complaint. In January 2010, the agency required the drug to feature a “black box” warning highlighting the potential for kidney failure, liver failure and gastrointestinal hemorrhage that in some cases were fatal, according to the complaint.

Increasing Refills

Novartis wanted to increase the refills of the drug because “its own market research had shown that a significant percentage of physicians and patients were opting to discontinue Exjade therapy” because of side effects, the officials said in the complaint.

In late February 2007, Novartis told BioScrip that because it generated lower levels of refills compared with other pharmacies, it had been placed on a “performance improvement plan,” according to the complaint.

Novartis “expects that the specialty pharmacies it works with conduct vital patient outreach in a manner wholly consistent with NPC’s commitment to patient care,” Masow said. “BioScrip reached out to patients using its own protocols to provide education, counseling and information about proper administration of the medicine and to fulfill prescriptions that have been prescribed by a patient’s treating physician.”

Officials are seeking triple damages against Novartis and civil penalties under the False Claims Act.

The case is ABC v. DEF, 1:11-cv-08196, U.S. District Court, Southern District of New York (Manhattan).

San Diego Pharmacy to Pay $11.4M to Settle Kickback Allegations

See other posts about doctors bought by insurance companies.

SD Pharmacy to Pay $11.4M to Settle Kickback Allegations
Alleged kickbacks included tickets to sports events, spa, golf and ski outings and expensive dinners
NBC 7
Dec 28, 2012

The U.S. Justice Department says a specialty pharmacy based in San Diego has agreed to pay about $11.4 million to resolve allegations it used kickbacks to induce doctors to write prescriptions for its products.

The Justice Department says under an agreement announced Thursday, Victory Pharma Inc. agreed to pay a criminal forfeiture of $1.4 million to resolve anti-kickback statute allegations and more than $9.9 million to resolve false-claims allegations.

The alleged kickbacks included tickets to sports events, concerts and plays, spa, golf and ski outings, expensive dinners and other events.

Authorities also say Victory encouraged sales representatives to schedule paid "preceptorships" in which they shadowed doctors in their offices to induce them to prescribe Victory's products.

A company phone listing could not be immediately located.

This San Diego doctor accepts checks from drug company representatives

I had an interesting experience on July 24, 2012 when I drove a friend to the doctor.

The receptionist said the doctor doesn't accept checks, so my friend paid with a credit card.

Then I saw one of those drug company representatives walk through the door. If you don't know what I mean, then you might have a particularly ethical doctor. The representatives are young and good-looking. This one was a man in a suit with the posture as straight as a marine's. He strode in pulling his black case on wheels, and was immediately ushered inside.

In my experience, the representatives are more often very attractive young women.

As I was leaving, I noticed a check lying on the receptionist's desk. I saw it was for $30.00. Apparently the doctor does accept checks--from drug representatives. I assume he was being paid to listen to the agent.

The receptionist saw me looking at the check, and she grabbed it quickly, then she couldn't seem to think of any good place to hide it, so she set it back down.

Years ago I had a neighbor who was prescribed an off-label drug (meaning used for a condition for which it was not approved by the FDA) she didn't need. That doctor's office was crawling with representatives almost all the time. Both the drug company and the doctor got in trouble with the law.

I wonder if my friend's doctor will prescribe unnecessary drugs after his discussion with the drug company agent.