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Biggest Whistleblower Case of 2015: Novartis' $390 Million Settlement

By: Allan M. Siegel

Of all the hundreds of millions of dollars in whistleblower recoveries obtained by the Department of Justice in 2015, the Novartis settlement stood apart. In November 2015, the DOJ announced a $390 million settlement with Novartis Pharmaceuticals. The case began as a whistleblower lawsuit that alleged the Swiss pharmaceutical company violated the False Claims Act and the Anti-Kickback Statute.

The lawsuit alleged that Novartis paid pharmacies to recommend two of its drugs: Exjade, which is an iron reduction treatment for people who undergo blood transfusions, and Myfortic, a drug used by kidney transplant patients to decrease the threat of organ rejection.

The DOJ specifically alleged that Novartis gave kickbacks to specialty pharmacies Bioscrip and Accredo by providing patient referrals and rebates in return for recommendations of Exjade prescription refills. The whistleblower lawsuit alleged that Novartis pressured pharmacies to downplay Exjade’s life-threatening side effects while emphasizing the drug’s benefits. The federal government also charged Novartis with giving rebates to pharmacies to recommend that patients switch from competitor drugs to Novartis’ Myfortic drug.

As part of the settlement, Novartis agreed to:

  • Pay $370 million to resolve False Claims Act allegations with $286.9 million paid to the federal government and $83.1 million to state governments.
  • Forfeit $20 million under the federal civil forfeiture laws.
  • Make admissions about Novartis’ relationship with specialty pharmacies.
  • Change its corporate integrity agreement with the U.S. Department of Health and Human Services’ Office of Inspector General so that Novartis must undergo an independent review and extend the agreement for an additional five years.

Novartis’ $390 million settlement was the largest whistleblower case of 2015. Millenium Health’s $256 million settlement was the second-largest qui tam case. Whistleblowers who file a claim under the False Claims Act are eligible to receive between 15 and 30 percent of a whistleblower recovery.

Although the attorneys of Chaikin, Sherman, Cammarata & Siegel, P.C. did not represent the whistleblowers in the Novartis case, our whistleblower attorneys are experienced and able to handle similar claims. If you have original, non-public information about a pharmaceutical company paying kickbacks to a pharmacy, hospital, or other health service provider, please contact us immediately for a free, confidential consultation. Because strict deadlines apply to filing a whistleblower claim, we recommend getting in touch at your earliest convenience.