Novartis should face claims it paid kickbacks to advertise MS drug, US appeals court docket guidelines

By Jonathan Stempel

NEW YORK (Reuters) -A U.S. appeals court docket on Friday revived a whistleblower lawsuit accusing Swiss drugmaker Novartis (SIX:NOVN) of paying unlawful kickbacks to medical doctors to induce them to advertise its blockbuster a number of sclerosis drug Gilenya.

In a 3-0 resolution, the 2nd U.S. Circuit Court docket of Appeals in Manhattan mentioned the whistleblower Steven Camburn can attempt to show that Novartis violated the federal False Claims Act by holding “sham” speaker occasions to spice up Gilenya gross sales.

Camburn, a former Novartis gross sales consultant, mentioned the drugmaker paid medical doctors hundreds of {dollars} and handled them to dinners at high-end eating places to talk at purportedly instructional occasions that have been truly social in nature.

He mentioned this induced authorities medical health insurance packages together with Medicare Half D, Medicaid and TRICARE to be defrauded when medical doctors and pharmacies submitted reimbursement claims for Gilenya that have been tainted by kickbacks.

Circuit Decide Myrna Perez mentioned Camburn sufficiently alleged that Novartis holding speaker occasions with few or no official attendees, paying medical doctors excessively for canceled occasions, and deciding on audio system to encourage prescription writing created a “sturdy inference” the drugmaker supposed to induce fraud.

She agreed with seven different federal appeals courts that in whistleblower circumstances, defendants violate the federal Anti-Kickback Statute when no less than one goal of their compensation is to induce purchases of federally reimbursable healthcare merchandise.

Novartis and its legal professionals didn’t reply to requests for remark.

The False Claims Act lets whistleblowers sue on behalf of the federal government, and share in recoveries.

Friday’s resolution vacated a September 2022 dismissal by U.S. District Decide Kimba Wooden in Manhattan, and returned the case to her. It mentioned Wooden correctly dismissed a few of Camburn’s claims.

James Miller, a lawyer for Camburn, mentioned he appeared ahead to addressing his shopper’s “core allegations” in court docket.

Camburn sued Novartis in Could 2013, about 2-1/2 years after Gilenya gained federal regulatory approval.

Gilenya gross sales have been declining due to competitors from generic variations.

Gross sales fell to $925 million in 2023 from $3.22 billion in 2019, and totaled $443 million within the first 9 months of 2024.

Novartis agreed in 2020 to pay greater than $729 million to settle U.S. authorities fees it paid unlawful kickbacks to medical doctors and sufferers to spice up drug gross sales.

The case is US ex rel Camburn v. Novartis Prescription drugs Corp, 2nd U.S. Circuit Court docket of Appeals, No. 22-2708.