Nessel joins $678M settlement to resolve kickback allegations

Michigan Attorney General Dana Nessel announced Tuesday that Michigan will receive a portion of a $678 million settlement with Novartis Pharmaceuticals Corp., resolving allegations that the company paid kickbacks to medical providers in the form of cash, meals, entertainment, and honoraria payments to induce them to prescribe various medications that treat hypertension or Type 2 diabetes.

The settlement includes 27 other states and the District of Columbia, with about $3 million of the total settlement amount resolving claims specifically related to Michigan’s Medicaid program.

From January 2002 and November 2011, Novartis allegedly paid kickbacks to doctors to prescribe Lotrel, Valturna, Starlix, Tekamlo, Diovan HCT, Tekturna HCT and Exforge HCT. Additionally, between January 2010 and November 2011, Novartis allegedly engaged in the same conduct related to its drugs Exforge, Diovan and Tekturna. Novartis systemically paid doctors to speak about certain drugs at sham events, with a veneer of education applied in an attempt to avoid the law, and covered the costs of lavish meals and entertainment for attendee doctors, to induce doctors to write prescriptions for these Novartis drugs in violation of Michigan’s Medicaid False Claim Act.  

In a stipulation filed in federal court in connection to the settlement, Novartis admitted aspects of the scheme, including that it engaged in excessive meal and alcohol spending, minimal medical discussions at Novartis’s events and repeat attendance by doctors.