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New York accuses Novartis of making kickbacks to up drug sales


New York's attorney general has accused Novartis Pharmaceuticals Corp. of paying kickbacks to a New York-based pharmacy company to boost sales of iron-reduction drug Exjade.

In response, East Hanover, N.J.-based Novartis said in a statement that it is “dedicated to improving patient health and supports medication adherence program integral to this goal.”

Separately, on Thursday, an appeals court upheld a $225,000 jury verdict against Novartis in a product liability lawsuit.

Aside from the suit against Novartis, New York Attorney General Eric T. Schneiderman said in a Wednesday statement that the pharmacy, Elmsford, N.Y.-based BioScrip Inc., has agreed to pay $15 million to cover costs to Medicaid and Medicare nationally for excessive Exjade prescriptions. Exjade often is prescribed to patients who need regular blood transfusions, according to the statement.

In addition to New York, other states participating in the BioScrip settlement negotiations included representatives of the attorneys general from Nebraska, North Carolina, South Carolina, Washington state and Texas, according to a separate statement by the Washington state attorney general's office.

According to the New York charges, the kickback scheme to encourage Exjade's use began in 2007, after Novartis executives became concerned that patients taking Exjade were discontinuing its use because of harmful side effects.

As part of the alleged scheme, BioScrip employees made thousands of calls to Medicaid recipients in New York and other states from an Ohio call center to encourage them to refill Exjade prescriptions or resume taking Exjade.


Novartis created an “Exjade Scorecard” that measured how long patients took the medication that also was used to give more new patients to the pharmacy that kept patients on the drug the longest.

The complaint alleges BioScrip often won this competition, “and received valuable new patient referrals as a result,” according to the New York attorney general's office.

It said the investigation of the matter was initiated by a whistle-blower.

In its response, Novartis said it “expects that the specialty pharmacies it works with conduct vital patient outreach in a manner wholly consistent with (Novartis') commitment to patient care. To that end (Novartis) worked with BioScrip to ensure it had the information needed to reach out to patients.”

Novartis said BioScrip contacted patients “using its own protocols to provide education, counseling and information about proper administration of the medicine” and to fill prescriptions.

Novartis' statement said there have been “post-marketing reports” of kidney and liver failure as well as a reduction in the number of blood cells that have associated with Exjade's use, among other possible side effects.

The New York attorney general's office said BioScrip sold most of its pharmacy business in May 2012.

A BioScrip spokeswoman had no comment.