Six current and former executives of pharmaceutical giant Novartis were indicted this week. According to the Korea Herald, the executives are charged with paying over $2.3 million in bribes to doctors. In addition to the Novartis workers, fifteen doctors and the publishers of six medical journals were also charged.
Although those charged were all affiliated with Novartis’ Korean affiliate, the company could also face charges in the United States if the accusations are true.
News sources say that the executives paid bribes in order to induce Korean physicians to prescribe their products. Kickbacks are illegal in both Korea and the United States. In order to avoid detection, the group allegedly funded “academic events” that were sponsored by the medical journals. Anyone finding money flowing to medical journals would be less suspicious than if money was paid directly to doctors.
The company acknowledged the arrests and said the actions of the group were not condoned. The company promised an “internal review.”
Novartis No Stranger to Bribery Allegations
The promises of an unbiased internal review by the company ring hollow to us. Last fall the company paid $390 million to end a False Claims Act whistleblower lawsuit alleging kickbacks to pharmacies. This year the company’s Chinese affiliate settled charges brought by the SEC claiming the company offered international trips to doctors. In both cases the company settled charges without admitting any wrongdoing.
If all this isn’t enough, the company is reportedly under investigation for paying bribes to Turkish officials.
Congress has outlawed kickbacks in the healthcare industry. It is a crime to pay, offer or receive bribes or other inducements made to induce healthcare decisions. Those decisions should always be based on medical necessity the patient’s needs, not Novartis’ profits.
Kickbacks, Bribes and Whistleblower Awards
Although the federal Anti-Kickback Statute does not offer a whistleblower award, under the False Claims Act whistleblowers with inside information about kickbacks can still receive rewards.
Bribery of foreign officials is prohibited by the Foreign Corrupt Practices Act. If any of the doctors in Korea were government officials or publicly employed, Novartis could face huge fines in the U.S. Once again, whistleblower awards are available for information about bribes to foreign officials.
Unfortunately, the bribery allegations against Novartis don’t shock us. We are more concerned about the participation of medical journals in this seedy suspicious scheme. Honest physicians rely on medical journals to provide unbiased research on medical advances and treatment of disease. If a journal is willing to help Novartis launder money destined to bribe doctors, it becomes very possible that these journals may be swayed to publish biased or even incorrect medical information.
The Koreans have not yet unsealed the complaints. At this writing, we believe that several medical journal publishers have been charged but we don’t know the extent of their involvement. We also remind readers that Novartis itself has not been charged.
Normally we aren’t so quick to connect the dots but given the company’s track record, we are worried that the six executives arrested are just the tip of the iceberg.
Healthcare fraud is a huge problem in the United States. As this post shows, the problem is global. Healthcare giants like Novartis should take the lead and set an example for others in the field. Unfortunately, whenever I read news reports about big pharma, it usually isn’t good news;
If you inside information about fraud involving prescription drugs or government healthcare programs, you may be eligible for an award. Whistleblowers can receive up to 30% of whatever the government receives from the wrongdoers.
If you have inside information about bribes to foreign officials, the SEC’s Whistleblower Program offers similar awards. Even folks outside the United States are eligible for awards.
Fortunately, both the False Claims Act and the SEC’s whistleblower program have powerful anti-retaliation protections.
Mahany Law – We Represent Whistleblowers
The whistleblower lawyers at MahanyLaw are dedicated to helping you stop fraud, protecting you from retaliation and getting you the maximum awards allowable. In the last five years we have helped our clients receive over $100 million in awards.
For more information, contact attorney Brian Mahany at or by telephone at (414) 704-6731 (direct). All inquiries are protected by the attorney – client privilege and kept completely confidential. Not ready to call? Visit our 11 step Guide to Blowing the Whistle or check out our whistleblower FAQ’s.
** Like they say on TV, all suspects are innocent until proven guilty. An indictment or criminal charge is only an accusation.