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Novartis sets aside millions to settle bribery allegations

Novartis Pharmaceuticals Corp. (Novartis) recently announced it will set aside $700 million to settle claims made by the Department of Justice (DOJ). The DOJ recently accused the pharmaceutical giant of illegally bribing physicians and other health care professionals to prescribe their medications.

The government cracked down on Novartis, stating sessions the company touted as educational meetings to inform medical professionals about their medications were “little more than social occasions” for doctors. During these gatherings, the government claims the company provided lavish dinners and other perks that were in direct violation of the Anti-Kickback Statute (AKS). The allegations stem from events that occurred from 2002 through 2011.

The allegations require the company to resolve two different issues:

  • Criminal charges. The DOJ’s health care fraud allegations can result in financial penalties and, depending on the severity of the accusations, potential prison time.
  • Violation of compliance agreement. Novartis, as a stipulation for a previous AKS violation, agreed to implement a Corporate Integrity Agreement. This compliance agreement was supposed to help the company avoid similar violations in the future. If these allegations are substantiated, the agreement failed. This could make it difficult for the company to argue that another, updated agreement would be enough to allow Novartis to continue operations in the future.

The company must navigate both issues to help ensure future success. At this time, the company is still operating, and operations will likely continue.

Navigating through these types of allegations requires careful planning and strong legal team. Those in similar situations are wise to act to protect their interests. An attorney experienced in health care fraud defense can help.

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