Novartis AG's "Sham Events" Could Affect North Carolina Doctors

Published: Apr 01, 2016

Novartis AG's ‘Sham Events’ Could Affect North Carolina Doctors
March 30, 2016
By Alex Keown, BioSpace.com Breaking News Staff

RALEIGH, N.C. – Payments to North Carolina doctors of more than $250,000 made by Novartis AG in 2014 could come under federal scrutiny after the Swiss-based company was accused of a kickback scheme, the Triangle Business Journal reported this morning.

Novartis has been accused of hosting or supporting about 80,000 “sham” events in which the government maintains the drug company “wined and dined” doctors to prescribe the company’s cardiovascular drugs. Physicians attending those events were from all points across the globe, including the Triangle area, which includes the Research Triangle Park, home to a number of large and small pharmaceutical companies and contract research organizations. An analysis conducted by the Journal indicates there were more than 1,000 payments made by Novartis to Triangle physicians in 2014 alone worth more than a quarter-of-a-million dollars. There was more than $24 million spent on Triangle doctors by more than 500 pharmaceutical companies 2014.

The Novartis payments to physicians were for various events, such as trips to Hooters restaurants, fishing trips to Florida, excessively lavish meals and more, according to the U.S. government. Federal authorities said Novartis provided funds for a group of Chinese physicians to attend a conference in Chicago, but instead took them on sightseeing tours of places like Niagara Falls in New York.

This is not the first time Novartis has been under scrutiny for allegations of kickbacks. Last year, Novartis settled a civil lawsuit related to allegations of kickbacks. In 2013, the U.S. Attorney for Manhattan filed the healthcare fraud lawsuit against Novartis alleging that as a result of Novartis’ “kickback scheme, Medicare and Medicaid have issued tens of millions of dollars in reimbursements based on false, kickback-tainted claims.” In November 2015, Novartis agreed to pay $390 million to settle a civil lawsuit related to the kickback payments to specialty pharmacy companies that distributed the drugs Exjade and Myfortic. Although Novartis paid the amount, they neither admitted nor denied liability.

The latest move by U.S. Attorney Preet Bahara of New York’s Southern District, was filed March 25. The government is seeking information about events the company may have put on to encourage physicians to prescribe the medications. The government is seeking documents to support allegations Novartis “defrauded federal health-care programs of hundreds of millions of dollars over a decade,” Bloomberg reported. The government is building upon a previous case against Novartis for kickback payments made to doctors to prescribe certain company medications.

Novartis is fighting the government in court. On March 22 Novartis sought a hearing from a judge over the alleged 80,000 events, saying the government “exploded” the size of the case.

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