Joint State-Federal Investigation Launched Against Novartis for Kickback Scheme

Novartis has been accused of paying pharmacy firm BioScrip to promote drugs directly to patients, in a civil case brought by state and federal prosecutors.

The complaint states that the East Hanover, N.J.-based company boosted its sales of the iron-reduction drug Exjade by giving referrals and rebates to BioScrip, which recommended refills to its patients.

According to the Washington Attorney General, the government alleges the kickback scheme began in 2007, when Novartis became concerned that patients were discontinuing use of Exjade because of side effects. The investigation revealed BioScrip employees made thousands of phone calls to Exjade patients and downplayed the side effects of the drug.

BioScrip, based in Elmsford, N.Y., agreed to a $15 million state-federal settlement to resolve allegations that it caused pharmacies to submit tens of thousands of false claims to Medicare and Medicaid, according to AP News.

A statement released by Novartis disputes allegations and emphasizes that the drugmaker supports outreach by pharmacies in order to encourage medication adherence.

The issue of kickbacks was not specifically addressed, but Novartis states that it is "committed to high standards of ethical business conduct and compliance in all aspects of its business and invests significant time and resources to ensure it does business in a responsible manner" and that it intends to defend itself in this litigation.

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