Novartis is a large Swiss pharmaceutical company with headquarters in Basel, Switzerland. Revenue for 2025 was over $54 billion with profits of $14 billion.
According to a press release dated July 1, 2020: “Acting Manhattan U.S. Attorney Announces $678 Million Settlement Of Fraud Lawsuit Against Novartis Pharmaceuticals For Operating Sham Speaker Programs Through Which It Paid Over $100 Million To Doctors To Unlawfully Induce Them To Prescribe Novartis Drugs”
“This matter was initially brought to the Government’s attention by a whistleblower who filed a complaint pursuant to the False Claims Act.”
“As part of the settlement, NOVARTIS admitted and accepted responsibility for certain conduct alleged by the Government including the following:
- Some NOVARTIS sales representatives intended the honoraria paid to doctors to be an inducement to these doctors to prescribe more NOVARTIS drugs.
- NOVARTIS paid many high-prescribing doctors tens or hundreds of thousands of dollars in honoraria.
- In thousands of instances, NOVARTIS paid for the same group of doctors, often colleagues or friends, to have dinners together repeatedly. Doctors in these groups would sometimes rotate being the speaker and receiving the honorarium payment.
- NOVARTIS sales representatives hosted programs at some of the most expensive restaurants in the United States, intending to induce the doctors in attendance to continue to write NOVARTIS prescriptions. These restaurants included some of the most high-end restaurants in the country, such as Masa, Daniel, Gramercy Tavern, Il Mulino, Babbo, Peter Luger, Le Bernardin, and Eleven Madison Park in New York City; Charlie Palmer’s in Washington, D.C.; Morton’s Steakhouse and the Four Seasons in Chicago; Joe’s Stone Crab in Miami; Abacus, Nobu, and the Four Seasons in Dallas; Gary Danko in San Francisco; Patina and Matsuhisa in Los Angeles; Grill 225 in South Carolina; and Commander’s Palace in New Orleans.
- Throughout the Relevant Period, more than 12,000 speaker programs and roundtables had meal spends that were considerably in excess of the $125 per person limit set by NOVARTIS’s compliance policies.
- For example, in 2008, at a speaker program held at Ruth’s Chris Steakhouse in Pikesville, Maryland, NOVARTIS held an event with only one doctor in the audience for the speaker’s presentation, at which it spent $448 per person on food and alcohol, in addition to the $1,000 honorarium payment provided to the speaker.
- During the Relevant Period, some NOVARTIS sales representatives conducted programs at venues where the focus was on entertainment, including fishing trips, sporting events, wine tastings, and hibachi tables. NOVARTIS conducted hundreds of events at wineries and golf clubs.
- Sales representatives also conducted events at Hooters.
- At many of NOVARTIS’s speaker programs, the sales representative hosting the event did not require the speaker, who was being paid an honorarium, to deliver a presentation at all, or allowed the speaker to click through the power point presentation in a matter of minutes. In those instances, the majority of the time was spent socializing and enjoying dinner.
- NOVARTIS in a number of instances paid doctors honoraria for purportedly speaking at events that never took place.
- On Long Island, at least one NOVARTIS sales representative organized fraudulent speaker programs by arranging for a restaurant to create fake receipts to make it appear that a dinner had taken place, and then using the budgeted funds to purchase gift cards that were distributed to high-prescribing doctors. Doctors were then also paid honoraria for “speaking” at these sham events.
- NOVARTIS’s compliance training materials suggested that emails advocating illegal kickbacks were improper in part because they “reflect[] ignorance of the import of written communications, and put[] the Company at risk.” NOVARTIS’s Chief Compliance Officer also stated in training presentations: “If you don’t have to write it, don’t. Consider using the phone.”
“This settlement resolves a lawsuit captioned United States ex rel. Bilotta v. Novartis Pharmaceuticals Corp., No. 11-Civ.-0071-PGG (S.D.N.Y.) initially filed under the whistleblower provision of the FCA, which permits private parties to file suit on behalf of the United States for false claims and share in a portion of the government’s recovery.”
See 7-page Department of Justice press release below.