(Updates with new dollar amount based on settlement with states, quote from U.S. Attorney Preet Bharara)
By Nate Raymond
NEW YORK, May 1 (Reuters) - U.S. authorities said on Friday that a unit of Express Scripts Holding Co will pay $60 million to resolve claims that it participated in a kickback scheme with Novartis AG to boost sales of a drug that led to improper government reimbursements.
Specialty pharmacy Accredo Health Group Inc has agreed to pay $45.1 million to the federal government and $14.9 million to a group of states as part of the accord, Manhattan U.S. Attorney Preet Bharara said in a statement.
Accredo has also agreed to cooperate with authorities in pursuing claims against Novartis, who Bharara said engaged in a “scheme that used the lure of kickbacks to co-opt a healthcare provider’s independence.”
The government claimed Novartis unlawfully offered patient referrals to Accredo from 2008 to 2012 in return for recommending patient refills of Exjade, which is intended to reduce excess iron in patients who receive blood transfusions.
Bharara’s office said the scheme violated the False Claims Act and the Anti-Kickback Statute.
As part of the settlement, Accredo made several admissions, which Bharara’s office in court papers said it hoped to use to expand the case against Novartis.
Express Scripts said a settlement “was the best possible solution.”
Novartis said it continued to dispute the allegations and will continue to defend itself.
Representatives for Bharara’s office did not respond to requests for comment.
In 2013 the government sued Novartis for allegedly providing discounts and rebates from 2005 to 2013 to induce at least 20 pharmacies to switch thousands of patients to Myfortic, an immunosuppressant.
The Justice Department also said that Novartis offered patient referrals and rebates to pharmacy BioScrip Inc to recommend refills of Exjade from 2007 to 2012.
The government said Medicare, the program for the elderly and disabled, and Medicaid, the low-income insurance program, improperly paid tens of millions of dollars of improper reimbursements. Eleven U.S. states are co-plaintiffs.
BioScrip settled for $11.7 million in January 2014.
The lawsuit stemmed from a whistleblower case by David Kester, a former Novartis respiratory account manager from Raleigh, North Carolina. He is also pursuing separate claims against Novartis and other companies regarding other drugs.
Bharara’s office is continuing a separate lawsuit against Novartis, claiming Medicare and Medicaid paid reimbursements based on kickback-tainted claims for drugs such as Lotrel, Valturna and Starlix.
The case is U.S. v. Novartis Pharmaceuticals Corp, U.S. District Court, Southern District of New York, No. 11-08196. (Editing by Jeffrey Benkoe and Ted Botha)