United States ex rel. Bilotta v. Novartis Pharm. Corp.

Novartis Pharmaceutical Corporation (Novartis) (defendant) sold a variety of pharmaceutical drugs through a network of sales representatives. False Claims Act relator Oswald Bilotta (plaintiff) alleged that from January 2002 through November 2011, Novartis systematically bribed doctors to encourage them to prescribe Novartis drugs for their patients. Specifically, Bilotta claimed that Novartis used speaker events as a mechanism to provide kickbacks to doctors. Although Novartis’s internal policies referred to the speaker events as having an educational purpose, evidence showed that the events contained only minimal presentations and that the attendees spent minimal, if any, time devoted to discussion of the drugs. Rather, the events were more accurately described as planned social outings. The same groups of doctors would attend the events involving the same topics within short time frames, with each doctor taking a turn in the role of the speaker. Events were also frequently held in locations not conducive to an effective educational presentation, such as sports bars without private rooms. The doctors who served as speakers were paid honoraria, even though they did not provide any substantive educational presentations. The honoraria payments ranged from $750 to $3,000 per event. Novartis tracked the return on investment in these speaker programs, finding that doctors who received payments for speaking prescribed Novartis’s drugs more often, resulting in Novartis’s speaker programs becoming a key part of its promotional strategy. Doctors were aware of Novartis’s incentives, knowing that the more they prescribed Novartis’s drugs, the more likely it was that they would be invited to be speakers again. This also caused increased prescription writing. Evidence showed that Novartis deliberately ignored the illegitimate practices associated with its speaker program. There were no internal controls to prevent the same doctors from repeatedly serving as speakers, nor were there any controls to oversee the content of the speaker events. Because the prescriptions were ultimately paid through federal and state reimbursement programs, Novartis violated federal and state antikickback laws, resulting in False Claims Act liability. In September 2010, Novartis entered into a settlement with the United States and several states to settle the False Claims Act claims. The settlement required Novartis to implement a comprehensive compliance program to ensure that there would be no future violations of federal and state antikickback laws, including strict oversight of sales representatives.