Novartis finalizes $390 million kickback settlement

After agreeing "in principle" to settle kickback allegations last month, Novartis finalized the $390 million deal, ending a drawn-out legal battle that has led to nearly half a billion dollars in recoveries, according to the Department of Justice.

The federal government first intervened in the whistleblower case against Novartis in April 2013, and eventually sought $3.4 billion in damages stemming from kickback payments that had been made to two specialty pharmacies that handled an iron chelation drug called Exjade and an anti-rejection drug for kidney transplant recipients, called Myfortic. As part of the settlement, Novartis agreed to pay $370 million to federal and state governments, and forfeit an additional $20 million in proceeds. The company also agreed to amend its corporate integrity agreement, allowing an independent review of its specialty pharmacy relationships for the next five years.

The two specialty pharmacies involved in the scheme, BioScrip and Accredo Health Group, agreed to pay a combined $75 million to settle charges, meaning the government will collect $465 million in recoveries between the three companies.

The finalized agreement with Novartis also required that the company "make extensive admissions concerning its relationship with specialty pharmacies." The settlement comes at a time when specialty pharmacies are coming under fire for their relationship with manufacturers. Over the last several months, Philidor Rx has attracted attention for its relationship with Valeant Pharmaceutical International, leading to a lawsuit filed by one California pharmacist, and reports that UnitedHealth had cut off Philidor following billing irregularities. Employees of the specialty pharmacy said the company responded by using alternate provider numbers to submit claims.

For more:
- here's the DOJ announcement

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