The Department of Justice sued Swiss pharmaceutical giant Novartis twice this week for allegedly treating doctors and pharmacies to kickbacks, bogus speaker fees, fishing trips, and Hooters outings in an effort to promote Novartis drugs.
Novartis routinely billed drug presentations that the DOJ alleges were little more than "social events" for doctors at high-end restaurants, Florida fishing trips, and, well, Hooters. And while $1,000 dinners at Nobu may be old hat in the drug industry, Novartis took it to another level, providing kickbacks to pharmacies in an effort to scam Medicare, forcing the government to pay out tens of millions of dollars.
Nor is this Novartis' first time down this particular road. Just three years ago, the company paid out $422.5 million for illegally marketing drugs and — you guessed it — providing kickbacks to health care professionals. After settling the suit, Novartis signed a Corporate Integrity Agreement, promising that this time they were really, really going to change.
And change they did. According to the complaint, Novartis devised new methods to bribe doctors and pharmacists, often holding multiple dinner "conferences," hosted by the same doctors and attended by the same physicians and pharmacists, all charged to the Novartis account. Although the company promised a cap of $125/person, they used creative accounting practices to bill the higher costs as "unmet minimums." And while the presenting doctors were expected to use slideshows to lead discussions of the drugs, Novartis sales reps often did not require these presentations, and in some cases, may have instructed doctors to refrain from presenting.
But paying for doctors was apparently not enough for Novartis. The other complaint filed this week charges that Novartis also paid more than 20 pharmacies with discounts and rebates to switch transplant patients to a Novartis drug, Myfortic, rather than the cheaper, generic drugs that were available, bilking tens of millions of dollars in reimbursements.
In addition to the treble-damages sought by the government, Novartis could also face exclusion from contracting with federal healthcare programs.