Novartis Defends Itself Against Kickback Allegations From Former Employee

Swiss pharma giant Novartis has found itself at the center of a legal battle that could determine if the company engaged in a research project that was a kickback in disguise.

Former Novartis executive Min Amy Guo has alleged that in 2012, the company initiated a study of breast cancer drug Afinitor with McKesson Corporation. The study of Afinitor, which received approval from the U.S. Food and Drug Administration (FDA) in 2012 as a breast cancer treatment, would have been performed by McKesson and overseen by a client-focused group at Novartis, as opposed to Guo’s group, the Health Economics and Outcomes Research Group, which she helmed. The move, Guo’s attorneys have argued in court, was a violation of federal kickback statutes. According to Guo’s legal filings, as reported by NJ.com, when Guo raised objections to the nature of the study, Novartis began to raise its own concerns about Guo and ultimately terminated her – an investigation that her attorneys called “a cover to fire her.”

In her lawsuit against the company, Guo said the study as it was designed was a “clear violation” of processes that oversee those types of third-party studies. Because of the conflict, the study appeared to be a kickback under the guise of research. Guo, according to the arguments, believed that the design of the study was in danger of being in violation of a Corporate Integrity Agreement the company signed with the U.S. Department of Justice in 2010 as part of an earlier settlement. That particular agreement, law360 reported, required Novartis to comply with all federal healthcare program requirements, including kickback rules. According to the lawsuit, Guo raised concerns about the study and the appearance that structure of the agreement could appear to be an inducement for McKesson, which had acquired its own oncology business in 2010.

The study was expected to have a one-month duration and have a cost of about $400,000 – a figure that Guo claimed in her lawsuit was too costly. The lawsuit does not point to any specific financial kickbacks or otherwise related to the McKesson study, NJ.com noted. McKesson is also not named in the lawsuit.

The study was ultimately scrapped the next year, NJ.com reported, but shortly thereafter, Guo was terminated by the company.

While Guo claimed she was fired for being something akin to a whistleblower, Novartis has disputed that claim. The company argued that Guo violated company policies and abused the trust placed in her by Novartis. In his own arguments, Novartis attorney John B. McCusker, said Guo was not a whistleblower. He argued she “praised the proposed study and ultimately approved it,” law360 reported. Rather, the company said that Guo was terminated after complaints were filed by two subordinates and violated a series of company policies. Among the concerns raised by Novartis was that while on a call with a vendor and its attorney, Guo did not include a member of the company’s legal or ethical team. That was after members of her staff raised compliance concerns, Law360 reported, citing McCusker’s arguments. Additionally, Novartis said that Guo did not disclose a potential conflict of interest regarding her role with the company and her role as a member of an advisory council for a cancer survivor’s support group.

Novartis, for its part, is no stranger to allegations of kickbacks. In 2016, the company agreed to pay $390 million to resolve a lawsuit claiming the company paid kickbacks to increase sales of several prescription drugs. More recently, the company was embroiled in a scandal related to a $1.2 million payment to Essential Consultants, owned by Michael Cohen, an attorney who was close to President Donald Trump who has since been sentenced to prison for tax fraud and perjury.