A federal judge on Thursday refused to dismiss a U.S. government lawsuit accusing Novartis AG (NOVN.VX) of civil fraud for having conducted two illegal kickback schemes to boost sales of drugs covered by Medicare and Medicaid. U.S. District Judge Colleen McMahon in Manhattan rejected the argument by the Swiss drugmaker’s Novartis Pharmaceuticals Corp unit that the lawsuit should be dismissed because the government had failed to show how it had been defrauded. McMahon, however, invited Novartis by June 13 to seek dismissal on a different ground, that the claims were legally inadequate, saying she needed to more fully review that issue.
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