Prescription Drugmaker Bribed Doctors With Cash and Visits to Hooters

Prescription drugmaker Novartis AG was sued this week by the US government, for the second time, this time forallegedly bribing physicians into increasing prescriptions of the company's drugs. The drug maker is accused of coercing the doctors by taking them on outings to Hooters, on fishing trips, and offering pricey fees for speaking engagements. The lawsuit is seeking triple damages and civil penalties, claiming federal health care programs were forced to pay millions of dollars for kickback-tainted claims as a result. In a private False Claims Act lawsuit filed in 2011, the government also alleged that Novartis violated the Anti-Kickback Statute to increase sales of two of its hypertension drugs, Lotrel and Valturna, and its diabetes drug, Starlix. "Novartis corrupted the prescription drug dispensing process with multimillion-dollar 'incentive programs' that targeted doctors who, in exchange for illegal kickbacks, steered patients toward its drugs," said Manhattan US attorney Preet Bharara in a statement on Friday. "Novartis reaped dramatically increased profits on these drugs, and Medicare, Medicaid and other federal health-care programs were left holding the bag." Bharara's office also sued Novartis last week for allegedly paying kickbacks, disguised as rebates and discounts, to at least 20 pharmacies for switching patients to its immunosuppressant drug Myfortic.

Novartis said they are challenging both lawsuits and will defend themselves in court. "As a leading healthcare company, NPC is committed to high standards of ethical business conduct and regulatory compliance in the sale and marketing of our products," said Novartis spokeswoman Julie Masow in an e-mail. "The physician speaker programs targeted in yesterday's lawsuit are an accepted practice in the industry." She argued that the rebates and discounts cited by the government in the Myfortic case are "a customary, appropriate and legal practice" and the kickback lawsuit is "inconsistent with law and policy in this area." If Novartis loses, it would be another massive financial blow to the drug makers for illegal activity; earlier this week a jury ordered them to pay $2.1 million in a trial over Aredia and Zometa bone-strengthening drugs. In September 2010, Novartis paid $422.5 million over paying kickbacks and illegally promoting drugs for unapproved uses.

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