Novartis to Pay $390 Million to Settle False Claims Whistleblower Case

Novartis Pharmaceuticals has settled part of its False Claims Act liabilities for $390 million.


The company faced $3.35 billion in fines if they had gone to court and lost on just two drugs — a likely scenario considering that three other companies involved in the fraud — BioScrip, Accredo Health Group, and Express Scripts — had already settled their part of the case for a combined total of $75 million.

Novartis was already operating under a Corporate Integrity Agreement (CIA).

Patrick Burns of Taxpayers Against Fraud Education Fund said that the cash settlement is not the end of Novartis’ fraud problems

“Novartis faces additional False Claims Act lawsuits immediately ahead covering more allegations of fraud involving a dozen other drugs,” says Burns.

Burns said that the Department of Justice and Novartis agreed that a “material breach” of the CIA “constitutes an independent basis for Novartis’ exclusion from participation in the Federal healthcare programs.”

“Attorney General Loretta Lynch has promised to move beyond accounting to true accountability,” Burns said. “This is going to be a real test of that resolve. The Department will lose credibility if it does not hold individuals accountable in a case of this size where the company is a recidivist already operating under a corporate integrity agreement.  At the very least, the Department should name and recommend to the Office of the Inspector General at HHS that culpable key and mid-level executives be considered for personal exclusion.”

“If you want to show there’s a new sheriff in town, you have to do more than settle cases for cash while executives inside the company get to keep their jobs, their promotions, their bonuses, stock options, and freedom,” Burns said.

Burns notes that the False Claims Act remains the most effective fraud-fighting tool ever devised.

“Billions of dollars a years are being recovered from fraudsters thanks to the False Claims Act and the public-private partnership it has forged.”

David Kester was the whistleblower in all four of the Novartis-related cases which have settled for a combined total of $465 million.

Kester and his lawyers at Vogel, Slade & Goldstein will share between 15 and 25 percent of the amount recovered under the civil False Claims Act part of the case.

Burns said that whistleblowers like Kester are “true heroes protecting the integrity of programs like Medicare and Medicaid upon which scores of millions of lives depend.”

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