| NEW YORK, Sept 30
NEW YORK, Sept 30 A federal judge said Novartis
AG must face a U.S. government lawsuit accusing the
Swiss drugmaker of paying multimillion-dollar kickbacks,
including a $9,750 dinner for three at a Japanese restaurant, to
induce doctors to prescribe its drugs.
U.S. District Judge Paul Gardephe in Manhattan on Tuesday
let the government pursue its entire lawsuit, brought under the
federal False Claims Act. He also said New York can pursue most
of its state law claims in a related lawsuit.
Julie Masow, a Novartis spokeswoman, said the Basel-based
company is reviewing Gardephe's 90-page decision, and will
continue to defend itself against the allegations.
The federal government's lawsuit is one of two it filed in
April 2013 against Novartis, seeking triple damages over
alleged kickbacks to doctors.
Authorities claim that Novartis caused Medicare and Medicaid
to pay millions of dollars in reimbursements from 2002 to 2011
based on kickback-tainted claims for drugs such as Lotrel and
Valturna to treat hypertension, and the diabetes drug Starlix.
They said these resulted from the East Hanover, New
Jersey-based Novartis Pharmaceuticals Corp unit having lavished
hefty speaking fees on doctors to appear at thousands of sham
programs that were merely "social occasions," where little work
Authorities said Novartis also feted some doctors at
high-end restaurants such as the Japanese restaurant Nobu in
Dallas, Smith & Wollensky in Washington, D.C. and the three
Michelin-starred L20 in Chicago, while others dined at the
Novartis allegedly spent over $65 million and conducted more
than 38,000 speaker programs for Lotrel, Valturna and Starlix
alone over a decade. One doctor was allegedly paid to speak at
his own office eight times.
"The pleadings explain in detail why the speaker events were
shams and how they served as a vehicle for kickbacks," Gardephe
wrote. "Novartis has cited no case demonstrating that the
government entities' pleading of particular false claims is
Masow said Novartis is committed to "high standards of
ethical business conduct," and that speaker programs "can help
educate other healthcare providers about the appropriate use of
medicines so they can make informed prescribing decisions."
In the other Novartis case, U.S. District Judge Colleen
McMahon in August let the government pursue most claims over
reimbursements for Myfortic and Exjade, respectively used by
patients with kidney transplants and patients who get blood
The Lotrel, Valturna and Starlix case was originally brought
in January 2011 by former Novartis sales representative Oswald
Bilotta. On Tuesday, Gardephe let Bilotta pursue part of his own
lawsuit, which raises additional claims.
A spokeswoman for U.S. Attorney Preet Bharara in Manhattan
declined to comment. A spokesman for New York Attorney General
Eric Schneiderman was not immediately available for comment.
Eric Young, Bilotta's lawyer, said his client is pleased his
case will continue.
The federal government often joins False Claims Act lawsuits
that it believes have greater merit. Whistleblowers share in
damages that are recovered.
The case is U.S. ex rel. Bilotta v. Novartis Pharmaceuticals
Corp, U.S. District Court, Southern District of New York, No.
(Reporting by Jonathan Stempel in New York; Additional
reporting by Karen Freifeld; Editing by David Gregorio)