Editors’ Note: Adapted from The New York Times, July 1, 2020. [Associated Press]. While not exactly an example of deep state functioning, the case against Novartis is emblematic of the rule of law and the continuing responsibility of government agencies to protect the public. Perhaps more significantly, the scheme was initially uncovered due to a whistleblower claim from an employee. It may be inferred that Novartis was making so much money from its scheme that it was blinded in the detection of the criminal and ethical conflicts it promoted. A whistleblower David slays a Goliath.
Novartis Pharmaceutical Corp. will pay $678 million to the U.S. government and various states to settle a lawsuit over a sham speaker program that distributed cash, expensive dinners and other treats to induce doctors to prescribe its products, federal authorities announced.
The settlement of the lawsuit was announced by Acting Manhattan U.S. Attorney Audrey Strauss, who said the company splurged on “speaking fees, exorbitant meals, and top-shelf alcohol that were nothing more than bribes to get doctors across the country to prescribe Novartis’s drugs.” Strauss is “acting” because AG Barr and P45 fired her predecessor, Geoffrey Berman under whom this action against Novartis was concluded.
The chief executive of Novartis said in a statement that the company has already changed, “with new leadership, a stronger culture, and a more comprehensive commitment to ethics embedded at the heart of our company.”
“With these agreements we mark an important milestone on our journey to build trust with society as we continue re-imagining medicine to improve and extend lives all around the world,” it said.
The settlement resolves a 2011 whistleblower lawsuit accusing Novartis of violating the federal False Claims Act and Anti-Kickback Statute.
The company admitted giving doctors cash, golf and fishing trips, and lavish meals at some of the nation’s fanciest restaurants to induce them to prescribe Novartis cardiovascular and diabetes drugs that were reimbursed by federal healthcare programs, the government said in a release.
Federal authorities alleged that Novartis earned hundreds of millions of dollars in federal reimbursements for selling drugs sold by doctors benefiting from tens of thousands of sham educational events at high-end restaurants and other venues.
With the program, the company paid exorbitant speaker fees to doctors who gave no meaningful presentations while their guests enjoyed fine food and drinks, the government said in court papers.
In settling, Novartis made extensive factual admissions and agreed to strict limitations on any future speaker programs, according to terms of the deal.
According to the head of New York’s FBI office, the company’s conduct was “reprehensible and dishonest. Not only did Novartis incentivize doctors to host these speaking events, reps bribed the doctors to write more prescriptions of the company’s drugs to give Novartis an advantage over competitors within their field. Greed replaced the responsibility the public expects from those who practice medicine.”
William F. Sweeney Jr., head of New York’s FBI office, said the company’s conduct was “reprehensible and dishonest.”
“Not only did Novartis incentivize doctors to host these speaking events, reps bribed the doctors to write more prescriptions of the company’s drugs to give Novartis an advantage over competitors within their field,” he said. “Greed replaced the responsibility the public expects from those who practice medicine.” So much for the Hippocratic oath.
Some high-prescribing doctors received tens or hundreds of thousands of dollars for their work as Novartis often reimbursed the same group of doctors, colleagues and friends who had dinners together repeatedly, the government said.