Novartis has expressed its dismay after the US government announced a second lawsuit against the Swiss drugmaker in four days, accusing it of paying millions of dollars in kickbacks to doctors.
The allegations have been made by the US Attorney's Office for the Southern District of New York acting on two whistleblower complaints. The first deals with an investigation into discounts and rebates to specialty pharmacies for the immunosuppresant Myfortic (mycophenolic acid).
The second suit is related to a probe into speaker programmes conducted by Novartis in the USA for the hypertension pills Lotrel (almodipine/benazepril) and Valturna (aliskiren/valsartan) and the diabetes drug Starlix (nateglinide). The Justice Department has filed civil false claims lawsuits and is seeking damages and civil penalties.
Among the allegations, Novartis is accused of paying doctors to speak about the drugs "at events that were often little or nothing more than social occasions for the doctors". The DoJ claims that many speaker programmes "were also held in circumstances in which it would have been virtually impossible for any presentation to be made, such as on fishing trips off the Florida coast". Other Novartis events were held at Hooters restaurants.
Dinner for two cost over $3,000
The lawsuits also noted one dinner for three, including the speaker, at a Washington DC restaurant which cost over $2,000. At another programme held on Valentine’s Day in 2006, Novartis paid $3,127 for a meal for two, while the DoJ also cites data which shows that during January 2002 to November 2011, nearly $65 million was spent and more than 38,000 speaker programmes were conducted for the three aforementioned drugs.
In September 2010, the company signed a corporate integrity agreement with US authorities agreeing to implement a rigorous compliance programme. This was agreed after Novartis paid $422.5 million to settle allegations that it marketed the epilepsy drug Trileptal (oxcarbazepine) and five other drugs for unauthorised use in the USA.
The DoJ says the company is not keeping to the terms of that settlement, claiming that "although instances of speaker programme abuse were reported to Novartis, sanctions were generally mere slaps on the wrist". In some cases, sales representatives who violated the firm's policies were nevertheless promoted.
Andre Wyss, president of Novartis' US operations, says "we disagree with the way the government is characterising our conduct in both of these matters and we stand behind our compliance programme". He added that the company "invests significant time and resources to help ensure we conduct our business in an ethical and responsible manner. We are committed to doing it right".
'Customary, appropriate and legal practice'
Novartis says of the Myfortic suit that discounts and rebates by pharmaceutical companies "are a customary, appropriate and legal practice as recognised by the government itself". The firm claims the suit is "a significant expansion of the Anti-Kickback Statute that is inconsistent with law and policy in this area, and threatens to undermine pharmaceutical company discounting practices that benefit both consumers and payers, including the government".
As for the second suit, Novartis says the government's "wide-ranging allegations that its speaker programs lacked any legitimate business purpose are without merit". It says the events are designed to inform physicians about the appropriate use of medicines and the company has "numerous controls in place to help ensure they are conducted in a compliant fashion. These programmes are an accepted and customary practice in the industry".
