Connecticut has joined a global settlement with Novartis Pharmaceuticals Corporation to resolve allegations the drug maker provided kickbacks to certain specialty pharmacies in exchange for recommending the drug Exjade to Medicaid and Medicare patients. Novartis has paid the states and the federal government $390 million to resolve the issue.
Connecticut stands to gain $1.6 million for the state’s Medicaid program. There will also be a state-only supplement of $195,760 for the HUSKY program.
The states alleged that between 2007 and 2012 Novartis paid kickbacks to three specialty pharmacies – BioScrip, Accredo and US Bioservices. These pharmacies were selected by Novartis to be part of a closed distribution network through which most Exjade prescriptions in the United States were filled. Novartis created the distribution network, which it called EPASS and had significant control over how many patient referrals each pharmacy received, the states alleged.
In the course of the scheme, Novartis is alleged to have pressured the specialty pharmacies by threatening to exclude them from the EPASS network or to reduce the number of patient referrals they received from EPASS. In addition, Novartis allegedly set up a contest in which the pharmacy that kept patients on Exjade the longest would receive additional patient referrals from EPASS.
The settlement stems from a whistleblower lawsuit. Two of the specialty pharmacies named as defendants in the case, BioScrip, Inc. and Accredo Health Group, Inc., have already agreed to pay $15 million and $60 million, respectively, to resolve claims that they accepted kickbacks from Novartis to promote Exjade.
