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article imageU.S. government continues action against drugs firm Norvatis

By Tim Sandle     Apr 1, 2016 in Business
The U.S. government is seeking documents from the pharmaceutical company Novartis. This is for an investigation into the allegation the Swiss company provided so-called ‘kickback’ payments to doctors.
The request for the documents has come from the U.S. Attorney's Office in Manhattan. The amount of information being sought is considerable, relating to some 79,000 events that took place over a 10-year period. Each of the events has been described by the prosecutors as a "sham," with the motivation being to induce doctors to prescribe its drugs.
Novartis is challenging this allegation and has countered by saying the events were educational and designed only to inform medics about the company’s product range (in particular anti-hypertensive drugs and medication for diabetes treatment.) The U.S. government contends that restaurants and fishing trips, which some of the events apparently were, are not the kind of venues to launch drug educational programs. The government is also questioning the cost of running the events, which were sometimes $3,000 for two people.
For these reasons, the U.S. authorities are concerned about ‘kickbacks’. A kickback is a form of negotiated bribery in which a commission is paid to the bribe-taker in exchange for services rendered.
The current state of play is that the drugs company has filed a legal request, seeking to avoid handing over the documents. The legal action has been proceeding for some time, starting in 2013. Here the U.S. Department of Justice was concerned that kickbacks had led to over $100 million in unwarranted reimbursement payments by federal healthcare programs.
In the past, Novartis has settled civil claims related to allegations of kickbacks involving specialty pharmacy prescribing of key drugs. With those settlements, no admission of liability was made.
These allegations are not the first to be made against Novartis. As Digital Journal has previously reported, in 2013 the European Commission imposed multi-million euro fines on Johnson & Johnson and Novartis for what it called "shocking" breaches of competition law. There have also been previous investigations in relation to European anti-trust laws.
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