Novartis to Face Lawsuit Over Doctor Kickbacks

HIGHLIGHTS:

• Novartis is set to face a lawsuit again over allegations that it paid kickbacks to doctors to promote its MS drug Gilenya
• The whistleblower, a former sales representative for the company, sued the company in 2013 but was dismissed by another New York judge
• Novartis’ Gilenya sales have been declining due to high competition

Swiss pharmaceutical giant Novartis AG is set to face anew a whistleblower lawsuit claiming that it paid illegal kickbacks to doctors to convince them to promote its multiple sclerosis drug Gilenya.

The 2nd US Circuit Court of Appeals in Manhattan, New York, in a 3-0 decision, said that whistleblower Steven Camburn could try to prove that Novartis violated the False Claims Act by holding sham speaker events to boost drug sales.

Friday’s decision vacated US District Judge Kimba Wood’s dismissal of the case in September 2022.

Novartis allegedly paid, treated doctors to dinner

Camburn, a former sales representative for the company, sued Novartis in 2013, almost three years after Gilenya won federal regulatory approval. He alleged that Novartis paid doctors a hefty amount and treated them to high-end dinners to speak at events that were actually social in nature.

He said this caused government health insurance programs including Medicare Part D, Medicaid, and Tricare, to be defrauded when doctors and pharmacies submit reimbursements for Gilenya.

Judge Myrna Perez, who is presiding over the case, said that Camburn’s claims of the company holding events with few or no attendees, excessively paying doctors for events, and selecting speakers to encourage prescription writing, created a strong inference that the drugmaker intended to induce fraud.

She also agreed with seven other federal appeals courts that defendants violate the Anti-Kickback Statute when at least one purpose of their compensation is to induce purchases of federally reimbursable healthcare products.

According to Reuters, Novartis and its lawyers were not available to comment at press time.

James Miller, Camburn’s lawyer, said he looked forward to addressing his client’s core allegations in court.

Due to high competition with generic brands, Gilenya sales were said to have declined to $925 million in 2023 from $3.22 billion in 2019 and totalled $443 million in the first nine months of 2024.

Novartis agreed in 2020 to pay more than $729 million to settle US government charges it paid illegal kickbacks to doctors and patients to boost drug sales.

The False Claims Act lets whistleblowers sue on behalf of the government, and share in recoveries.