Accredo to Pay $60 Million to Settle False Claims Lawsuit in Connection with Novartis Kickback Scheme

Accredo Health Group will pay $60 million to settle False Claims Act charges.

The charges related to a kickback scheme with Novartis Pharmaceuticals involving the prescription drug Exjade.

accredo

The Justice Department said that it will intervene against Novartis over the same conduct alleged against Accredo.

The case was brouanght by whistleblower David Kester.

Kester was represented by Shelley Slade of Vogel Slade & Goldstein in Washington, D.C. and Arun Subramanian of Susman Godfrey in New York.

Accredo was represented by Daniel Meron and Allen Gardner of Latham & Watkins in Washington, D.C.

Federal officials alleged that Novartis provided kickbacks, in the form of patient referrals and related benefits, to Accredo in exchange for Accredo’s recommending refills to Exjade patients.

The defendants understated the serious and potentially life-threatening side effects of Exjade when promoting the drug’s benefits to patients.

Under the terms of the settlement agreement, Accredo will pay $45,060,598.87,  admits numerous facts concerning its relationship with Novartis and cooperate with the United States in the prosecution of the claims against Novartis.

Accredo will also pay $14,939,401.13 to a group of states to settle the states’ claims based on the same alleged conduct.

In January 2014, the government entered into a multimillion dollar settlement with another codefendant, Bioscrip Pharmacy, for similar conduct.

“This is the second substantial settlement with an alleged co-conspirator of Novartis in connection with a scheme that used the lure of kickbacks to co-opt a healthcare provider’s independence,” said U.S. Attorney Preet Bharara. “Novartis used Accredo to promote refills under the guise of purported ‘counseling’ and ‘education,’ and in doing so, Novartis caused patients to receive one-sided advice that did not discuss Exjade’s serious, potentially life-threatening, side effects.  This settlement with Accredo restores to the public fisc tens of millions of dollars paid out for kickback-tainted drugs.”

Novartis markets and manufactures Exjade, an iron chelation drug approved for use by patients who have iron overload resulting from blood transfusions.

For five years until 2012, Novartis orchestrated a scheme whereby it offered kickbacks, in the form of patient referrals and other benefits to certain specialty pharmacies, including Accredo and Bioscrip, in exchange for increasing their Exjade refills through biased recommendations to patients.

Accredo and Bioscrip were part of a Novartis-created exclusive distribution network for Exjade called the Exjade Patient Assistance and Support Services, and through this network Novartis was able to refer Exjade patients to particular pharmacies within the network.

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