US kickback charges force Novartis to pay settlement of $729 million
NEW YORK (US) – The US Department of Justice said on Wednesday drug manufacturer Novartis AG has agreed to pay more than $729 million to settle federal government charges of giving illegal kickbacks to doctors and patients to boost medicine sales.
In a bid to resolve charges that it conducted tens of thousands of faux educational events treating doctors to exorbitant speaker fees, costly dinners and cocktails to coax them to prescribe its drugs for diabetes and heart ailments often, the Swiss pharma giant will have to pay $678 million.
The company will also have to pay $51.25 million to settle charges of funneling money through three charitable establishments to cover co-payments of Medicare patients so they would purchase its drugs.
According to a company spokesman, the costs of the settlement were covered by provisions that it had already made.
Terming the incentives for doctors “nothing more than bribes”, US Attorney Audrey Strauss in Manhattan said federal healthcare programmes paid hundreds of millions of dollars to reimburse prescriptions that were the result of kickbacks.
In a statement, Strauss said: “Giving these cash payments and other lavish goodies interferes with the duty of doctors to choose the best treatment for their patients and increases drug costs for everyone.”
According to the Justice Department, the speaker events and other programmes were held from 2002 to 2011, while the co-payments were made from 2010 to 2014.
(Photos syndicated via Reuters)
This story has been edited by BH staff and is published from a syndicated field