Novartis Lawsuit Accuses Pharma Giant Of Huge Kickback Scheme

There may be more going on behind the counter of your local pharmacy than you think.

On Tuesday, the U.S. government sued big-name Swiss multinational Novartis Pharmaceuticals Corporation for its violation of the federal anti-kickback statute. The statute prohibits the offer or payment of rebates and other inducements to cause the purchase of any drug or service covered by Medicare, Medicaid or other health care program; Novartis had allegedly been making just those offers.

According to the lawsuit, Novartis disguised kickbacks as performance rebates and discounts to convince pharmacies to get their patients to switch over to Myfortic — Novartis’ internationally-selling drug designed to keep the body from rejecting its new organ after a kidney transplant. These kickbacks, the government asserts, have caused the public to pay tens of millions of dollars for drugs dispensed by pharmacists who had buddied up to Novartis, and have at the same time awarded particular pharmacists several hundred thousand dollars to "shoulder the burden" of switching 700 to 1,000 transplant patients to Myfortic.

Novartis denied the government accusation, saying that “NPC is committed to high standards of ethical business conduct and regulatory compliance in the sale and marketing of [its] products."

But this isn’t the first time that Novartis has faced legal controversy.

In 2008, the company got in trouble with the Food and Drug Administration for overstating the efficacy of its Focalin XR ADHD drug. In 2009, the company declined to provide free vaccines to the poor in order to counter a chronic flu epidemic, saying developing nations or donor nations should have covered the costs. In 2010, the company paid sexual discrimination penalties of over $3.3 million. And then later in that same year the company also forked over $422.5 million in criminal and civil claims for fraud charges.

But, from the company’s standpoint, these penalties and the 10% to20% alleged kickback fees to pharmacists who were switching transplant patients this year are, in the end, still profitable. The company ranked second among the worldwide pharmaceutical industry in sales in 2010 with an estimated $46.806 billion.

So, next time you go to pick up your prescription from your ole’, trusty pharmacist and he suggests a new brand of medication for you to try instead, just know that somewhere underneath that counter top may be the influential hands of some multinational behemoth pulling at your pharmacist’s pant leg to get you to change prescriptions.