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feds sue novartis pharma for paying kickbacks


May 14, 2013

Feds sue Novartis Pharma for paying Kickbacks

May 14, 2013. Manhattan. The Justice Dept announced it has filed two lawsuits against accused drug trafficking company Novartis. The feds now join a suit already filed by a whistleblower formerly employed by the pharmaceutical corporation. Details reveal yet another bribery and kickback ring centered on dozens of doctors paid to traffic the company’s drugs.

That’s not to say that all doctors are criminal drug dealers. In fact, just two weeks ago this outlet reported on a group of 120 cancer doctors who released a joint statement condemning Big Pharma corporations like Novartis for price gouging cancer patients. Records show that drug companies have systematically doubled, tripled and quadrupled the price Americans pay for their drugs. And they’ve done it for no other reason that to increase their corporate profits.

Read ‘Doctors slam Big Pharma for price gouging Cancer Patients’ for more information.

Doctors vs. Doctors

On one side of the fight are global pharmaceutical drug companies, corporate doctors, and various government agencies. On the other side are the American people and a small handful of honest and compassionate doctors who are sick and tired of the blatant crime and fraud permeating throughout the healthcare industry. And stuck in the middle are government prosecutors who thus far have refused to bring charges against any doctors, but have instead sought fines from Novartis and other drug companies.

As detailed in a report from ProPublica.com last week, two federal lawsuits filed in Manhattan accuse Novartis of instituting a bribery and kickback scheme that paid doctors to prescribe the corporation’s over-priced drugs. This isn’t the first episode either. The criminal activity is so widespread throughout the US healthcare system that the independent news outlet has been maintaining a database that includes over 2,000,000 bribes and kickbacks to doctors. Although, in the industry, they’re known as referral fees, finders fees, honorariums and gifts.

According to the database of drug company payments to doctors, Novartis is shown to have made at least $54,200,000 in such monetary awards to doctors who prescribe the company’s drugs. While that’s an incredible amount and explains why Americans pay so much more for their prescriptions than the rest of the western world, it pales in comparison to the drug companies that put the ‘Big’ in ‘Big Pharma’. The database shows Pfizer has made at least $538,200,000 in side payments to doctors, while Eli Lily comes in a close second having paid out $490,600,000.

Too big to jail

It seems banks and insurance companies aren’t the only ones that are too big, important, entrenched and enriched to criminally prosecute. In fact, even with the widespread and admitted criminal drug trafficking activity, federal authorities have refused to put anyone in jail.

To show how secretive and resistant the drug companies are regarding their bribery and kickback schemes, Novartis only began disclosing its payments to doctors in 2010. The company pled guilty to a misdemeanor criminal count, refused to admit wrongdoing, and paid a $422.5 million fine to Uncle Sam to quietly settle the charges. This time, just as with the 2010 case, Novartis is denying any criminal activity. “We disagree with the way the government is characterizing our conduct in both of these matters and we stand behind our compliance program” Andre Wyss said in a statement from the drug company.

Illustrating that Big Pharma isn’t the only one that’s apparently above the law, the ProPublica.com account reminds readers that of the 75 doctors proven to have received bribes from drug companies between 2008 and 2011, not one has been charged with any wrongdoing. And while they were shown to have endangered their patients’ lives in some cases, none have even been so much as censured, suspended or removed from practice.

Whistleblower accusations

According to former Novartis sales reps, the drug company engaged in widespread bribery of both doctors and pharmacies. In the case of pharmacies, the drug company paid pharmacists and pharmacy managers to market and promote Novartis’ drugs. The two dozen doctors caught up in the investigation are accused of taking bribes to prescribe the same drugs. One physician named in the lawsuit is shown to have been paid $150,000 since 2009.

Mirroring the two simultaneous government suits, the whistleblower suit against Novartis accuses the corporation of rewarding doctors who prescribed its drugs with payments of $250 to $500 per individual payment. For some doctors who flooded the market with Novartis prescriptions, those payments quickly added up to over $100,000 per doctor.

Former Novartis sales reps insist that thousands of doctors took part in the bribery and kickback scam. To illustrate their accusations, the suit describes one public event that was actually a front for the payment of bribes to 24 New York doctors and nurses. In that particular example, the drug company threw a lavish party for those specific healthcare professionals, awarding them monetary honorariums. But not a single doctor or nurse was there. They didn’t need to be to receive their payments, just keep prescribing Novartis drugs.

In another example cited in the lawsuit, Novartis actually hired family members of some of its most prolific prescription writers. One doctor is named in the suit for having received over $150,000 in payments, as well as having his wife and daughter-in-law hired by the drug company as sales reps. Another doctor named is shown to have received tens of thousands of dollars in payments while also seeing his son hired by Novartis as a sales rep.

Justice Dept attorneys are using the federal anti-kickback law to prosecute Novartis, and possibly the 24 doctors named in the two New York investigations. But legal experts point out that the way the law is written and interpreted, it’s almost impossible to attain a criminal conviction against drug-dealing doctors and Big Pharma corporations.

Federal prosecutors must show evidence of a premeditated conspiracy with documented proof that the company specifically set out to influence the prescription-writing habits of doctors by using bribes and kickbacks. As long as corporate executives and sales reps call such payments ‘honorariums’ instead of ‘bribes’, they will most likely continue to avoid jail time.

For further details, read the ProPublica.com account.


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