The United States is claiming $3.35 billion from Novartis AG in its alleged use of kickbacks to boost sales of two prescription drugs.
According to documents filed in a federal court in New York, the use of kickbacks in the form of rebates led federal health care programs to overpay for the medicines covered by Medicare and Medicaid.
Reports say that the Department of Justice is claiming up to $1.52 billion in damages. This triples the amount of money that Medicare and Medicaid spent for the drugs, resulting from kickbacks from 2004 to 2013.
A claim of $1.83 billion, in addition, goes to fines for allegedly false claims submitted to health care programs for reimbursement. This should cover $5,500 to $11,000 for each of the false claims totaling to more than 166,000.
The government claims that Novartis referred patients to three specialty pharmacies to whom they paid kickbacks in exchange of recommending the drugs to the patients. This violates the False Claims Act and Anti-Kickback Statute.
In the court filing, the Swiss company stood firm in saying that the rebates provided to the pharmacies were legitimate. Novartis denied having violated any laws in its sale of Exjade and Myfortic, according to reports.
Exjade is used to remove excess iron from the blood of patients receiving blood transfusions. Myfortic is used to prevent the rejection of kidney transplants.
In an email statement on Wednesday, the company said they "look forward to a full presentation of all of the evidence during the trial."
Novartis is being sued by the federal government, 11 U.S. states and whistleblower David Kester. Kester is a former sales manager at Novartis. The whistleblower's lawsuit was filed in 2011.
In another whistleblower's lawsuit filed by a different former employee of Novartis, the company also allegedly paid for kickbacks in the form of royalties to hospitals and fees for speaking engagements by medical experts.
The government normally settles False Claims Act cases before they go to trial. In the case of Novartis, a jury trial is scheduled to begin on Nov. 2.
