Novartis must face claims it paid bribes to promote MS drug, US appeals court rules Reuters
By Jonathan Stempel
NEW YORK (Reuters) – A U.S. appeals court on Friday renewed a whistleblower lawsuit against a Swiss drugmaker Novartis (SIX:) paying illegal bribes to doctors to induce them to promote his hit multiple sclerosis drug Gilenya.
In a 3-0 decision, the Second US Circuit Court of Appeals in Manhattan said whistleblower Steven Camburn can try to prove that Novartis violated the federal False Claims Act by holding “bogus” speaking events to boost sales of Gilenya.
Camburn, a former Novartis sales representative, said the drugmaker paid doctors thousands of dollars and treated them to dinners at top restaurants to speak at ostensibly educational events that were actually social in nature.
He said that led to government health insurance programs, including Medicare Part D, Medicaid and TRICARE, being defrauded when doctors and pharmacies submitted claims for Gilenya that were tainted by kickbacks.
District Judge Myrna Perez said Camburn had sufficiently argued that Novartis’ holding speaking events with few or no legitimate attendees, overpaying doctors for canceled events and selecting speakers to encourage prescription writing created a “strong inference” that the drugmaker intended to encourage fraud.
It agreed with seven other federal appeals courts that in whistleblower cases, defendants violate the federal Kickback Statute when at least one purpose of their compensation is to induce the purchase of federally reimbursable health products.
Novartis and its lawyers did not respond to requests for comment.
The False Claims Act allows whistleblowers to sue on behalf of the government and participate in recoveries.
Friday’s decision reversed the September 2022 dismissal of U.S. District Judge Kimba Wood of Manhattan and reinstated the case. It is said that Wood rightly rejected some of Camburn’s claims.
James Miller, Camburn’s lawyer, said he was looking forward to dealing with his client’s “major allegations” in court.
Camburn sued Novartis in May 2013, about 2-1/2 years after Gilenya received federal regulatory approval.
Gilenya sales are declining due to competition from generic versions.
Sales fell to $925 million in 2023 from $3.22 billion in 2019, and totaled $443 million in the first nine months of 2024.
In 2020, Novartis agreed to pay more than $729 million to settle allegations by the US government that it paid illegal kickbacks to doctors and patients to boost drug sales.
The case is US ex rel Camburn v. Novartis Pharmaceuticals Corp, US 2nd Circuit Court of Appeals, No. 22-2708.
