US files second lawsuit accusing Novartis of kickbacks

Accuses Novartis of causing Medicare and Medicaid programs to pay millions of dollars in reimbursements based on kickback-tainted claims for medication

The U.S. government on Friday announced its second civil fraud lawsuit against Novartis AG in four days, accusing a unit of the Swiss drugmaker of paying multimillion-dollar kickbacks to doctors in exchange for prescribing its drugs.

U.S. Attorney Preet Bharara in Manhattan said the government joined a whistleblower lawsuit filed against Novartis Pharmaceuticals Corp in January 2011 and which seeks triple damages under the federal False Claims Act.

The government accused Novartis of causing the Medicare and Medicaid programs to pay millions of dollars in reimbursements based on kickback-tainted claims for medication such as hypertension drugs Lotrel and Valturna and diabetes drug Starlix.

Twenty-seven U.S. states, the District of Columbia, and the cities of New York and Chicago also joined as plaintiffs.

"Novartis corrupted the prescription drug dispensing process with multi-million dollar 'incentive programs' that targeted doctors who, in exchange for illegal kickbacks, steered patients toward its drugs," Bharara said in a statement. "For its investment, Novartis reaped dramatically increased profits on these drugs, and Medicare, Medicaid, and other federal healthcare programs were left holding the bag."

On Tuesday, the government accused Novartis of inducing pharmacies to switch thousands of kidney transplant patients to its drug Myfortic in exchange for kickbacks disguised as rebates and discounts.

Novartis spokeswoman Julie Masow said the company disputes the claims in both lawsuits and will defend itself. Its Novartis Pharmaceuticals unit is based in East Hanover, New Jersey.

The original lawsuit over alleged kickbacks to doctors had been filed by Oswald Bilotta, a former Novartis sales representative who now lives in North Carolina. His lawyer was not immediately available for comment.

People who file whistleblower lawsuits on behalf of the government under the False Claims Act share in damage recoveries. The United States does not automatically participate in such lawsuits, but often joins cases it believes have greater merit.