Novartis Faces Revived Whistleblower Lawsuit Over Alleged Kickbacks
A significant ruling by the 2nd U.S. Circuit Court of Appeals in Manhattan has given new life to a whistleblower lawsuit accusing Novartis, a Swiss drugmaker, of engaging in illegal kickback schemes to promote its multiple sclerosis drug, Gilenya.
The Allegations
Steven Camburn, a former Novartis sales representative, claims that the company paid doctors thousands of dollars and treated them to lavish dinners to speak at supposedly educational events that were, in reality, social gatherings. These events, Camburn alleges, were designed to boost Gilenya sales and resulted in government health insurance programs, including Medicare Part D, Medicaid, and TRICARE, being defrauded.
The Court’s Decision
In a unanimous 3-0 decision, the appeals court ruled that Camburn can proceed with his lawsuit, which accuses Novartis of violating the federal False Claims Act. Circuit Judge Myrna Perez stated that Camburn’s allegations create a “strong inference” that Novartis intended to induce fraud by holding speaker events with few or no legitimate attendees, paying doctors excessively for canceled events, and selecting speakers to encourage prescription writing.
The Legal Background
The False Claims Act allows whistleblowers to sue on behalf of the government and share in any recoveries. In this case, Camburn is accusing Novartis of violating the federal Anti-Kickback Statute, which prohibits the exchange of anything of value for referrals or recommendations of federally reimbursable healthcare products.
Novartis’ History of Settlements
This is not the first time Novartis has faced allegations of illegal kickbacks. In 2020, the company agreed to pay over $729 million to settle U.S. government charges that it paid illegal kickbacks to doctors and patients to boost drug sales.
The Impact on Gilenya Sales
Gilenya sales have been declining in recent years due to competition from generic versions. In 2023, sales fell to $925 million, down from $3.22 billion in 2019. In the first nine months of 2024, sales totaled $443 million.
The Road Ahead
The case has been returned to U.S. District Judge Kimba Wood in Manhattan, who dismissed the lawsuit in September 2022. Camburn originally filed the lawsuit in May 2013, about 2-1/2 years after Gilenya won federal regulatory approval.
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