Novartis must face U.S. gov't lawsuit alleging drug kickbacks

NEW YORK Thu May 29, 2014 3:39pm EDT

NEW YORK May 29 (Reuters) - A federal judge has refused to dismiss a U.S. government lawsuit accusing Novartis AG 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 Swiss drugmaker's argument that the lawsuit should be dismissed because the government had failed to plead fraud "with particularity."

The government accused Novartis of having since 2005 induced at least 20 pharmacies to switch thousands of kidney transplant patients to its immunosuppressant drug Myfortic by providing kickbacks, in the form of discounts and rebates.

It also claimed that Novartis provided kickbacks, in the form of patient referrals and rebates, to BioScrip Inc in exchange for that company recommending refills of Exjade, a drug meant to reduce excess iron in patients who receive blood transfusions.

Julie Masow, a Novartis spokeswoman, declined to comment. (Reporting by Jonathan Stempel; Additional reporting by Nate Raymond; Editing by Lisa Shumaker)

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