In late March, a federal judge dismissed a whistleblower lawsuit against Novartis AG that accused the company of engaging in a kickback scheme to pay doctors to prescribe its multiple sclerosis drug Gilenya.
The lawsuit, originally filed by former Novartis sales representative Stephen Camburn, was backed by federal prosecutors and 28 state attorneys general. It alleged that Novartis used a sham speaker series as a way to funnel money to doctors in order to boost prescriptions of Gilenya.
New York District Judge Kimba Wood, however, found that the claim was ripe for dismissal as it had a lack of “detailed allegations and representative examples.” Judge Wood noted that “[t]he fact that some speaker events went over-budget, and that Novartis salespeople concealed the excess spending in Novartis’ internal records, is not enough to allege a kickback scheme orchestrated by Novartis.” She continued, writing that the lawsuit made “no allegations about why sales personnel concealed the excessive spending, whether they were instructed to do so, who the falsification was meant to deceive, or what role the falsification played in the alleged kickback scheme.”
Novartis’ Legal Woes Continue
While the dismissal of this claim may be celebratory, it does not end Novartis’ legal woes. The company is still facing federal charges in another kickback scheme case that involves pricey dinners at Nobu, a New York seafood restaurant, and nights out at Hooters. One of the alleged instances in that suit involved a sham promotional speaking event on a fishing boat.
Generic Competition
Novartis is also continuing its legal battle to prevent generics of Gilenya from hitting the market. In 2018, the United States Patent Office protected Gilenya from generic competition until 2027. Following that ruling, Novartis filed lawsuits in federal court to prevent companies from launching generic competitors.
In one of those cases, Judge Leonard P. Stark ruled in June 2019 that the launch of a generic would compromise Novartis’ ongoing Gilenya patent litigation in federal court and would impact Novartis’ market share before a decision is reached.
Unfortunately, despite the favorable ruling in summer of 2019, in December 2019, the United States Food and Drug Administration (FDA) approved the first three generic versions of the drug. While they won’t be on the market for the foreseeable future due to the June 2019 ruling by Judge Stark, it does start the clock on patent expiration.