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HomeNewsEuropean Pharmaceutical Giant Novartis Settles False Claims Act Whistleblower Case for $390 Million

European Pharmaceutical Giant Novartis Settles False Claims Act Whistleblower Case for $390 Million

Date Published
Nov 03, 2015

Novartis AG, a European based pharmaceutical company, agreed to settle a False Claims Act (FCA) lawsuit for $390 million, a week before the original $3.3 billion FCA lawsuit was set to go to trial on November 2, 2015. The initial lawsuit, filed in 2010 by qui tam whistleblower, David Kester, alleged that the pharmaceutical giant illegally offered kickbacks to pharmacies that agreed to participate in an illegal kickback scheme designed to boost the sales of its transplant drug Myfortic.  The Government joined the lawsuit, and also alleged that Novartis devised another scheme to increase refills of its iron chelation drug Exjade.

Myfortic, also known by the name “mycophenolic acid,” is an immunosuppressant used in organ transplant patients and its purpose is to help the new organ adapt to the body and decrease the threat of organ rejection. Given the increase in organ transplants, the demand for a drug of this type has opened the market for competition.  In fact, the Government alleged that in a head-to-head competition with Roche, another well-known pharmaceutical manufacturer and distributor of transplant drugs, Novartis sought to increase the sales of some of its prescription medication by offering incentives to pharmacies in the form of rebates.  For example, when a pharmacy recommended and sold targeted drugs manufactured by Novartis to patients seeking treatment related to an organ transplant, the pharmacy received cash back from Novartis and Novartis billed Medicare, Medicare, and other U.S. health care programs for reimbursement.  Fraudulent marketing practices are a violation of the FCA under the Anti-Kickback Statue and because Medicare and Medicare are under the jurisdiction of the U.S. Federal government even foreign companies must comply.

Provisions of the FCA makes it unlawful for a person or company to submit false claims under a Federal health care program with the intention of knowingly and willfully committing healthcare fraud. In addition, the whistleblower provision of the FCA was designed to prevent fraud on the government, and is one of the most effective methods that the Government has implemented for combating fraud.

Under the FCA, any person, who knows of an individual or company (international or domestic) that has defrauded the federal government, can file a “qui tam” lawsuit to recover damages on the government’s behalf.  Additionally, a whistleblower who files a case against a company that has committed fraud against the Government, may receive an award of up to 30 percent of the settlement. In this case, former Novartis employee, David Kester, will receive his share of the $390 million settlement for acting on behalf of the Government by bringing the case against Novartis.

If you have information concerning a potential case involving illegal agreements between pharmaceutical manufacturers and drug management companies, that involve a Federal Health Care program, such as Medicare, Medicaid, or Tricare, do not hesitate to take action. It is possible that you might be able to bring your own qui tam lawsuit under the False Claims Act, acting as a whistleblower on behalf of the US government. Before filing your lawsuit, be sure to consult with an attorney familiar with the intricacies of the False Claims Act and qui tam lawsuits, as these attorneys are best equipped to help protect your rights and help you gain your share of any monetary reward from a potential settlement.

If you would like to consult with one of our False Claims Act attorneys please fill out our Confidential Case Evaluation form, or call (202) 973-0900 to speak with a lawyer at the law office of Tycko & Zavareei LLP.

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