Novartis AG (NVS) - Get Novartis AG Report has agreed to pay around $680 million to 26 U.S. states liked to allegations of 'kickbacks' to healthcare providers to encourage them to prescribe the Swiss drugmaker's products.
New York Attorney General Letitia James said the agreement, which includes a $22.7 million payment to the state of New York and a $678 million payment overall, resolves allegations that go back as far as 2002, and lasted until 2011, and centered around drugs lncluding Lotrel, Alturna and Starlix.
The New York Attorney General's office said Basel, Switzerland-based Novartis was aware of doctors being paid to speak at "sham" events, which were 'falsely advertised as being educational" in order to disguise the payments. The case was brought the Attorney General following a whistle-blower complaint from Oswald Bilotta, a former employee in the group's East Hanover, New Jersey base in the United States.
“New Yorkers trust that their health care providers are prescribing medications in the best interest of patients,” said James said in a statement. “Novartis and its team of greedy doctors betrayed that trust by duping patients into taking medication as part of a fraudulent kickback scheme and cheated the state out of millions while putting the health and safety of countless individuals at risk."
"My office will continue to do everything in its power to protect New Yorkers and hold accountable any bad actors who attempt to break our laws or harm our residents,” she added.
Novartis' U.S.-listed shares were marked 0.25% lower in pre-market trading Friday to indicate an opening bell price of $86.08 each. The stock has gained around 22% since hitting a multi-year low on March 23.