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Government seeks $3.35 billion from Novartis for violations of AKS and FCA

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In late June 2015, the U.S. government filed papers in United States v. Novartis Pharmaceuticals Corp. notifying the court that it seeks $3.35 billion from Novartis in damages and civil fines. This amount roughly consists of $1.52 billion in treble damages and $1.83 billion in fines for the over 160,000 alleged false claims that Novartis submitted to the government.

Though news of the large potential damages is recent, the government has been investigating and litigating this case in the Southern District of New York for several years. In April 2013, the government filed its complaint and intervention against Novartis, alleging that Novartis violated both the False Claims Act and the Anti-Kickback Statute. The government contends that Novartis gave kickbacks, in the form of rebates and discounts, to twenty or more pharmacies in exchange for their switching kidney transplant patients from competitor drugs to Novartis’s drug. The government noted that Novartis is a repeat offender, referencing the government’s multi-million dollar settlement with the company less than three years ago for kickbacks.

Because this is a qui tam case, the whistleblower stands to receive a large award –between 15 to 25 percent of the ultimate settlement.

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