Novartis must face government lawsuit asserting illegal kickbacks to pharmacies

A federal judge has refused to dismiss a U.S. government lawsuit accusing Novartis AG of civil fraud for having conducted two illegal kickback schemes to boost sales of drugs covered by Medicare and Medicaid. The government is accusing Novartis of inducing 20 pharmacies to switch thousands of kidney transplant patients to its immunosuppressant drug Myfortic by providing kickbacks, in the form of discounts and rebates.

U.S. District Judge Colleen McMahon in Manhattan rejected the Swiss drugmaker’s argument that the lawsuit should be dismissed because the government had failed to plead fraud “with particularity.”

It also claimed that Novartis provided kickbacks, in the form of patient referrals and rebates, to BioScrip Inc in exchange for that company recommending refills of Exjade, a drug meant to reduce excess iron in patients who receive blood transfusions.