DOJ Pursues $3.3 Billion From Novartis Over Exjade, Myfortic Kickback Schemes

The U.S. government and 11 states are seeking as much as $3.3 billion from Novartis over an alleged kickback scheme involving its Exjade and Myfortic drugs, according to documents filed in the U.S. District Court for the Southern District of New York.

Specifically, the government claims Novartis and a group of pharmacies submitted 126,802 claims to Medicare and Medicaid and obtained $493 million in reimbursements for Exjade. For Myfortic, another group of pharmacies submitted 39,209 claims and obtained $14.5 million in reimbursement. The government claims it is entitled to triple damages and a civil penalty of $5,500 to $11,000 for each false claim.

Exjade (deferasirox) removes excess iron from blood caused by transfusions. Myfortic (mycophenolic acid) was approved by the FDA to prevent organ rejection in patients who receive kidney transplants.

In United States of America, et al. v Novartis Pharmaceuticals Corporation, et al., Novartis claims it did nothing wrong and the plaintiffs — the federal government, California, Georgia, Illinois, Indiana, Maryland, Michigan, New Jersey, New York, Oklahoma, Washington and Wisconsin — cannot prove actual damage. It also says it provided discounts and rebates for Myfortic to ensure that the pharmacies could afford to carry and dispense the drug to patients whose doctors had prescribed it.

The government alleges Novartis promised pharmacies discounts and rebates along with new patient referrals in exchange for doctors to prescribe the drugs and for patients to refill or renew their prescriptions. Those deals forced the government to pay out millions through Medicare and Medicaid programs.

A whistleblower lawsuit was filed in 2011 over five Novartis drugs; it was joined by the Department of Justice in 2013. A federal judge dismissed the government’s claims against three of the drugs in June 2014, but allowed the suit against Exjade and Myfortic to proceed.

A pretrial order filed June 29 says the government is demanding a jury trial and the court allocated three weeks for the prosecution to present its case. Novartis expects to need three weeks to present its defense as well. A trial is scheduled for November. — John Bechtel