On July 1, 2020, the U.S. Department of Justice (“DOJ”) announced two separate settlements with Novartis Pharmaceuticals Corporation (“Novartis”), totaling more than $729 million, involving allegations that Novartis paid kickbacks to doctors and patients.

In the first settlement, Novartis agreed to pay $51.25 million to resolve federal False Claim Act (“FCA”) allegations that it illegally paid patients’ copays.  The DOJ alleged that Novartis coordinated with and funneled money to charitable foundations to pay the copay for patients who otherwise could not afford Novartis’ drugs.  “As a result, the Novartis’ conduct was not ‘charitable,’ but rather functioned as a kickback scheme …,” according to U.S. Attorney Andrew E. Lelling for the District of Massachusetts.  Federal regulations have long barred the routine waiver of coinsurance and copayments for federal healthcare program beneficiaries.  

In the second settlement, Novartis agreed to pay over $591.4 million to resolve FCA allegations that it paid kickbacks to doctors.  Specifically, the government alleged that Novartis spent hundreds of millions of dollars on bribes under the guise of speaker programs or sham educational events.  Novartis will also pay $48.1 million to resolve state Medicaid claims and forfeit more than $38.4 million under the Civil Asset Forfeiture Statute.  The second settlement resolves United States ex rel. Bilotta v. Novartis Pharmaceuticals Corp., filed in the Southern District of New York under the qui tam (whistleblower) provisions of the FCA, which allows private parties to file FCA lawsuits on behalf of the government and, in return, receive anywhere between 15 and 30 percent of the government’s recovery.  The amount the private party receives in the Novartis matter has not been determined. 

“The government’s resolution of these matters illustrates the government’s emphasis on combating healthcare fraud.  One of the most powerful tools in this effort is the False Claims Act,” according to the government’s press release, which can be read here.  

The attorneys at Chilivis Grubman represent clients of all types and sizes in connection with False Claims Act investigations and qui tam litigation.  If you need assistance with such a matter, please contact us today.