A New York federal judge has rejected Novartis Pharmaceutical Corp.’s bid to dismiss a whistleblower lawsuit alleging the company engaged in illegal kickback schemes involving two of its drugs, which resulted in false claims to Medicare and 27 state Medicaid programs.
The lawsuit, filed under seal by whistleblower David Kester in 2011, was amended by the U.S. government in January, about nine months after it chose to intervene and take over the case as the U.S. False Claims Act allows it to do.
Mr. Kester worked for seven years as an account manager for Novartis, a position that required him to market the drugs Myfortic, a treatment for kidney transplant patients, and Exjade, administered after blood transfusions, among others, to clinics and physicians.
In its amended complaint, the U.S. alleges that Novartis gave discounts and rebates to at least 20 pharmacies as an inducement for them to switch from other drugs to Myfortic and Exjade.
District Judge Colleen McMahon ruled that the majority of the federal government’s claims could move forward, but dismissed claims filed by Maryland and Washington as well as claims dating before March 2009 before changes in health care laws mandated by the Affordable Care Act.
According to Law 360, “Although it limited its intervention claims to the drugs Myfortic and Exjade, the government claimed the defendants had caused Medicare and Medicaid to pay ‘tens of millions’ in improper reimbursements for those and other drugs, which Kester is addressing in a separate case.”
Mr. Kester is pursuing separate whistleblower claims against his former employer over the sales and marketing of three other Novartis drugs: TOBI, a cystic fibrosis drug, and Gleevec and Tasigna, two leukemia drugs.
The whistleblower provisions of the U.S. False Claims Act authorize private individuals such as Mr. Kester to file lawsuits on behalf of the U.S. government when they have sufficient original evidence of illegal kickback schemes and other fraud resulting in the submission of false claims to federally funded health care programs. Whistleblowers whose False Claims Act cases result in a recovery of funds receive up to 30 percent of the recovery as a reward.