In a closely watched False Claims Act case filed in the Southern District of New York, Novartis announced it has agreed to pay $390 million to settle whistleblower allegations that it had provided pharmacies kickbacks to promote certain drugs, which is prohibited under the federal Anti-Kickback Statute.
Three specialty pharmacies named as defendants in the same qui tam lawsuit, US ex rel. Kester v. Novartis Pharmaceuticals, previously paid a total of $135 million to the government to settle related charges against them.
The case is another example of how important whistleblowers and the False Claims Act are for government enforcement in the healthcare industry. Phillips & Cohen whistleblower attorney Erika Kelton observes on Forbes.com that kickbacks in the pharma industry are an issue not just in the US but also in other countries, such as China.
“Instead of cleaning up their act, pharma companies appear to have simply exported improper practices they developed first in the US to international markets,” she says. As a result, many are being investigated by the US for alleged Foreign Corrupt Practices Act violations.