Novartis Loses Summary Motion in Kickback Case

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A New York federal judge has denied a Novartis motion for summary judgment in a whistleblower case alleging a decade-long company-wide kickback scheme through which the company paid doctors honoraria and other forms of remuneration for taking part in purportedly educational promotional programs to induce doctors to prescribe the company’s drugs. The judge granted a federal government motion for partial summary judgment.

A 3/31 court order says Novartis argued that: (1) the government did not offer particularized evidence of a nationwide kickback scheme and impermissibly relied on “expert-created markers” to prove such a scheme; (2) the government seeks to hold Novartis liable for conduct that was resolved in a 2010 settlement agreement between Novartis and the Justice Department; and (3) the government cannot establish causation for either liability or damages under the False Claims Act.

The court held that: (1) the government provided sufficient particularized evidence of a company-wide kickback scheme, and the expert-created markers, criteria indicating that a promotional event lacks a medical educational purpose or value, are admissible evidence of such a scheme; (2) the settlement agreement does not release Novartis from claims concerning any drugs not listed as “covered drugs” in the agreement; (3) the government has offered sufficient proof of the company’s liability to survive summary judgment and has offered sufficient proof of resulting harm; and (4) the government may include new claims relating to “lunch-and-learns” in its case.

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