Healthcare Settlement

Novartis, a pharmaceutical company, agreed to a $678 million healthcare settlement with the Department of Justice (DOJ). Novartis was accused of violating the Anti-Kickback Statute (AKS) and False Claims Act (FCA) by having healthcare providers attend and speak at events to entice providers to prescribe Novartis to their patients. The details of the healthcare settlement are discussed below.

What Did Novartis Do Wrong?

The healthcare settlement required Novartis to admit fault and accept responsibility for several illegal activities.

The following are Novartis’ admissions:

Sales representatives were evaluated on their ability to spend their full promotional budget as part of their annual performance reviews.

Novartis supplied sales representatives with a list of doctors that had high-prescribing rates so that they may be nominated for speaking engagements.

Speaking events were hosted at expensive restaurants, with free-flowing alcohol.

Speaking events were focused on entertainment, including wine tastings and sporting events.

Several of the speaking events lacked educational content, and included repeat attendants, some of which were not healthcare professionals.

Sales representatives were encouraged to communicate via phone regarding kickbacks, rather than by email.

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Healthcare Settlement: Key Takeaways

Pharmaceutical companies often pay healthcare providers to promote their medications to other physicians. However, under many circumstances this is a violation of the Anti-Kickback Statute and False Claims Act, as evidence of the Novartis settlement, and another incident that resulted in the sentencing of a physician.

The Novartis healthcare settlement not only requires the company to pay $678 million in fines, but they were also required to sign a corporate integrity agreement (CIA). The CIA, signed with the Office of the Inspector General of the Department of Health and Human Services (HHS-OIG), set restrictions on Novartis’ speaker program.

The CIA states:

Internal Speaker Programs. Only healthcare providers employed by Novartis’ can be speakers. These can be conducted live. Novartis is not permitted to host speaking events at restaurants, and is prohibited from providing alcohol.

External Speaker Programs. These are conducted by healthcare providers who are not Novartis’ employees. These can only be held virtually. They can also only be conducted within 18 months of a new government reimbursed product. For each newly approved government reimbursed product, HHS-OIG will audit four external speaker programs.

Remuneration. Is limited to $100,000 total for all speakers per newly approved government reimbursed product, and $10,000 per speaker.

Education. Speaking events must only be held with a real educational need. If providers already have access to all relevant product information, a speaking event should not be held.

Speakers. Healthcare providers selected as speakers should be chosen objectively, based on standardized criteria, and should not be selected by sales representatives.