The drug maker has agreed to pay an amount of $390 million as settlement for the allegations made against it.
A settlement by Novartis AG has been finalized with the Justice Department of $390 million concerning the rebates that the pharmaceutical company has paid to specialty pharmacies. It was agreed and decided that the pharma company will pay the amount as part of a settlement which occurred due to the company paying kickbacks as rebates in an attempt to hike the prescription of certain drugs made by the company.
The drugs that were included in the settlement were Exjade – deferasirox which is a treatment for iron reduction specifically for patients who go through blood transfusion, Myfortic – mycophenolic acid specifically for patients who undergo kidney transplants. According to the agreed settlement, Novartis Pharma Company will introduce improved procedures and policies for a certain arrangement that are to be made with specialty pharmacies on a daily basis. Furthermore, training to Novartis employees will be provided and along with that the company’s annual report will also be shared with the government.
The initiation of this issue was back in 2007 when the company’s drug Exjade did not achieve the targeted sales that were anticipated by the pharmaceutical company. The sole reason as to why it did not meet the expected sales was because of the side effects of the drug. The drug has a severe side effect which can result in liver and kidney failure. Since the healthcare company went into a state of alarm when the sales did not reach the predicted sales that it started to boost it sales by pressurizing the specialty pharmacies. They would force nurses to introduce the drug to the patients and convince them to get refills of the drug by conducting clinical meetings and educational sessions.
An allegation against the drug-making company was filed back in January 2011 by David Kester in the Federal Court in Manhattan. According to his allegations, he accused the drug maker of giving high kickbacks to specialty pharmacies some of which were Caremark, CVS for the sole reason of increasing its sales specifically for five of its medicines which included Exjade, Tasigna, Myfortic, cystic fibrosis drug, Gleevec. The allegations were done based on the adverse effects that were witnessed from these drugs.
A similar situation arose initially in another pharmaceutical company called GlaxoSmithKline for which the healthcare company had to pay a settlement of $3 billion. The allegations made against GSK were civil and criminal claims that the company was seeking to promote and increase the sales of two of its drugs.
In the company’s defense, back in October, Joe Jimenez chief executive officer stated that the sole reason as to why the company went forth with these actions and rebates for the pharmacies was to make sure that the patients were getting the full medicine course that they required.