MANHATTAN (CN) - Pharmaceutical giant Novartis will pay $370 million to settle claims that it gave kickbacks to specialty pharmacies for recommending two of its drug products, Exjade and Myfortic.
The total agreement with the Manhattan U.S. Attorney's office comes to $390 million, with Novartis forfeiting $20 million in profits gained from the kickbacks.
The government first intervened in this lawsuit, which was originally filed by a whistle-blower, in April 2013. The government claimed Novartis gave kickbacks to specialty pharmacies in return for recommending Exjade, an iron chelation drug, and Myfortic, an anti-rejection drug for kidney transplant recipients.
The kickbacks with Exjade came in the form of patient referrals and rebates to the specialty pharmacies Bioscrip Inc. and Accredo Health Group. The government claims that to increase Exjade sales, Novartis incentivized and pressured the pharmacies to emphasize Exjade's benefits to patients while understating the drug's serious, potentially life-threatening, side effects.
The kickbacks for Myfortic came in the form of rebate contracts to pharmacies, the government claims.
As part of the settlement, Novartis made admissions about its relationships and interactions with specialty pharmacies in connection with distribution of Exjade and Myfortic and accepted responsibility for those admissions.
"Novartis turned pharmacies that should have been disinterested healthcare providers into a biased sales force for the drug-maker," U.S. Attorney Preet Bharara said in a statement. "Drug-makers and their relationships with healthcare providers - whether they are doctors, pharmacists, or nurses - must comply with the Anti-Kickback Statute. If they don't, we will bring all appropriate law enforcement tools to bear to ensure that they do."
This is the third settlement regarding this lawsuit. In January 2014 and April 2015, Bioscrip and Accredo agreed to pay a total of $75 million to resolve federal and state claims against them based on the same allegations.
U.S. District Judge Colleen McMahon approved the settlement on Friday. Of the $370 million, $286,870,245.98 will be paid to the Government, and $83,129,754.02 will be paid to settling states.
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