Bad Week for Novartis Pharmaceutical Company - Kickbacks and Defective Drug Liability


May 10, 2013

While the prospect of taking a drug or using a medical product when the medical risks have not been fully disclosed is a scary proposition under any circumstances, many consumers of pharmaceuticals would be shocked to know that some drug companies resort to kickbacks and bribes to induce medical professionals and others to promote their drug to patients. The recent False Claims Act lawsuit filed against Novartis provides a clear reminder that this practice continues in the medical device and pharmaceutical industries.

According to a Bloomberg report, Novartis AG (NOVN) allegedly provided medical professionals with compensation for speaking; outings to expensive restaurants and Hooters bars; deep sea fishing outings; and other perks to motivate physicians according to the complaint in a lawsuit filed this week by the U.S. attorney. The company also allegedly offered a "bonus" of five percent of their annual Myfortic® sales to a Southern California doctor for switching a minimum of a thousand patients to the drug.

The lawsuit is part of an action under the False Claims Act that the U.S. Attorney's office alleges resulted in the waste of millions in taxpayer dollars to pay for kickback-tainted claims. The bribe/kickback claims are related to the drugs Lotrel® and Valurna® which are used to treat hypertension and the company's diabetes drug Starlix®.

In a statement to Bloomberg, U.S. Attorney Preet Bharara explained, "Novartis corrupted the prescription drug dispensing process with multimillion-dollar 'incentive programs' that targeted doctors who, in exchange for illegal kickbacks, steered patients toward its drugs. Novartis reaped dramatically increased profits from these drugs, and Medicare, Medicaid and other health-care programs were left holding the bag."

Novartis is a major pharmaceutical company with sales figures in excess of $46,800 billion in the U.S. in a recent twelve month period. The sales of Myfortic® are reportedly up twelve percent from the previous year, resulting in net revenue of $579 million.

The reports of bribery and kickbacks by Novartis are even more surprising because the company just paid over $422 million three years ago to resolve civil and criminal charges related to the marketing of an epilepsy medication for unapproved uses. It has been a bad week for Novartis, which also lost a defective drug lawsuit related to their drugs designed to strengthen bones – Aredia® and Zometa®. The jury awarded a cancer patient $2.1 million against the drug company this week based on allegations that the drugs caused deterioration of the consumer's jaw.

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Category: Personal Injury

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