Novartis Agrees to Pay $678 Million to Settle Allegations of Illegal Kickbacks Involving Several of the Company's Cardiovascular Drugs

Thursday, 02. July 2020 02:28

PHILADELPHIA, July 01, 2020 (GLOBE NEWSWIRE) -- Attorney Eric. L. Young announced today that Novartis Pharmaceuticals Corporation ("Novartis") has agreed to settle alleged violations of the False Claims Act based on a qui tam complaint filed by whistleblower Oswald Bilotta, who is represented by McEldrew Young Purtell, Attorneys-at-Law ("McEldrew Young"), and Shepherd, Finkelman, Miller & Shah, LLP ("SFMS").

"Today's announcement puts the pharmaceutical industry on further notice that offering or paying unlawful remuneration to health care providers will have costly consequences," said Eric Young, managing partner of McEldrew Young's whistleblower practice. "The days are over for drug manufacturers who routinely provide incentives to doctors as a means of increasing the number of prescriptions written. There is no legitimate reason why drug manufacturers should take doctors to five-star restaurants, major sporting events or extravagant fishing excursions," Mr. Young added.

Mr. Bilotta's original whistleblower complaint was filed under seal in January 2011, in the United States District Court for the Southern District of New York, and alleged that Novartis' Cardiovascular Diseases ("CV") Division engaged in a variety of unlawful marketing schemes, as well as violations of the Anti-Kickback Statute, 42 U.S.C. § 1320a - 7b(b).  On April 26, 2013, the Department of Justice announced that the United States had intervened in the action and filed a complaint in intervention.  In the seven years since, McEldrew Young and SFMS have worked hand in hand with the U.S. Attorneys' Office for the Southern District of New York to further substantiate Mr. Bilotta's allegations through lengthy discovery and extensive legal arguments.  

Both the United States' and the whistleblower's complaints alleged that Novartis had fraudulently billed Medicare, Medicaid, TRICARE, and other federal and state-funded health care programs.  As part of the scheme, Novartis allegedly spent millions of dollars on incentive programs to doctors who steered patients toward drugs from Novartis' CV Division in exchange for illegal kickbacks.  The drugs implicated in the alleged kickback scheme, included Lotrel, Diovan, Diovan HCT, Tekturna, Tekturna HCT, Exforge, Exforge HCT, Valturna, Tekamlo, and Starlix. 

The alleged kickbacks violated the False Claims Act, 31 U.S.C. §§ 3729-33, as well as analogous state and local laws, because government-funded health care programs reimbursed many of the prescriptions written by the doctors who allegedly received kickbacks.  Eric Young noted that "U.S. taxpayers are often the biggest victims of pharmaceutical sales and marketing fraud because it increases the cost of health care for everyone -- precious Medicare and Medicaid dollars are squandered due to corporate greed rather than being spent for the public good."

Whistleblower Bilotta is a former Novartis sales representative from Long Island, New York, who identified and reported alleged unethical and illegal conduct by Novartis. Mr. Bilotta was also instrumental in identifying many of the physicians who allegedly accepted illicit financial incentives in exchange for prescribing the company's drugs.  The allegations set forth in Mr. Bilotta's complaint detail how Novartis provided doctors with a wide array of inducements, including meals at top restaurants, trips to sporting events, and chartered fishing excursions. Many of these events were held under the guise of "educational programs" where doctors were paid to purportedly provide medical information to their peers.

"Mr. Bilotta has demonstrated remarkable courage and perseverance in coming forward with evidence of Novartis' alleged wrongful conduct and seeing the case to its final resolution after nearly a decade," said Mr. Young. 

For Novartis, the past is prologue as it relates to the announcement of today's settlement. Remarkably, less than four months before the original whistleblower complaint was filed in this case, Novartis entered into a settlement agreement with the United States government where it agreed to pay nearly $422 million in fines and penalties, both criminal and civil, to resolve similar allegations that it paid kickbacks to prescribers of certain other Novartis drugs.

As the managing partner of McEldrew Young's whistleblower practice, Eric Young has established a distinguished record of success.  Mr. Young has recovered more than $2 billion dollars for the government on behalf of his whistleblower clients. McEldrew Young represents whistleblowers from across the country and abroad.  Many whistleblower cases are brought under the False Claims Act, which allows a private individual, known as a relator, to file a lawsuit on behalf of the United States government against a company that has perpetrated fraud against the government.  If a relator successfully recovers funds on behalf of the government, he or she can receive a reward of 15 percent to 30 percent of the civil monetary recovery.

Case citation: United States ex rel. Bilotta v. Novartis Pharmaceuticals, Corp., S.D.N.Y. 11-CV-00071-PGG.

CONTACT: Eric L. Young, Esquire, McEldrew Young, Attorneys-at-Law, 123 South Broad Street, Suite 2250, Philadelphia, PA 19109, 215.367.5151, www.mceldrewyoung.com, eyoung@mceldrewyoung.com

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