Novartis Must Face Whistleblower Claims of Paying Kickbacks for MS Drug Promotion

A U.S. appeals court on Friday revived a whistleblower lawsuit against Swiss pharmaceutical company Novartis, accusing the company of paying illegal kickbacks to doctors to promote its multiple sclerosis drug, Gilenya. The 2nd U.S. Circuit Court of Appeals in Manhattan ruled 3-0 that Steven Camburn, a former Novartis sales representative, can proceed with his claims that Novartis violated the federal False Claims Act through fraudulent “sham” speaker events designed to increase Gilenya sales.

Camburn alleges that Novartis paid doctors substantial sums of money and treated them to dinners at upscale restaurants to speak at events that were presented as educational but were actually social gatherings. These events allegedly led to fraudulent claims being submitted to government health insurance programs, including Medicare, Medicaid, and TRICARE, for Gilenya prescriptions influenced by kickbacks.

Circuit Judge Myrna Perez stated that Camburn’s allegations—including the holding of speaker events with minimal attendance, excessive payments for canceled events, and selecting doctors who would promote prescriptions—created a “strong inference” of Novartis’ intent to induce fraud. The court aligned with other federal appeals courts, agreeing that when compensation has the purpose of inducing the purchase of federally reimbursable healthcare products, it violates the federal Anti-Kickback Statute.

The decision reversed a September 2022 dismissal by U.S. District Judge Kimba Wood and sent the case back to her court for further proceedings. Camburn’s lawyer, James Miller, expressed confidence in addressing the core allegations in court.

Camburn filed the lawsuit in May 2013, shortly after Gilenya was approved for federal use. The drug’s sales have since declined due to competition from generics, dropping from $3.22 billion in 2019 to $925 million in 2023, with only $443 million in sales in the first nine months of 2024.

In 2020, Novartis agreed to pay over $729 million to settle U.S. government charges for similar kickback violations. The case is identified as US ex rel Camburn v. Novartis Pharmaceuticals Corp, 2nd U.S. Circuit Court of Appeals, No. 22-2708.