After recovering claims from a pharmacy provider, a group of 27 states are suing Novartis, alleging the company participated in a kickback scheme to boost Medicaid sales for a controversial blood drug.
Filed by New York Attorney General Eric Schneiderman, the suit accuses Novartis of paying kickbacks to the company BioScrip to increase the use of the drug Exjade. Those states and the federal government recently secured a $15 million national settlement over the company's promotion of Novartis' Exjade, the first oral iron chelator approved, in 2005, to reduce iron levels in patients with iron toxicity and chronic anemias.
Now that that settlement is through and BioScrip has sold off its pharmacy business, the 27 states, including California, Illinois, Maryland and Massachusetts, are going after Novartis.
Between 2007 and 2012, the suit alleges, the pharmaceutical corporation used a "closed distribution network" to sell Exjade prescriptions in the U.S. through one of three pharmacy companies, including BioScrip, and used a "scorecard to give more new patients to the pharmacy that kept patients on the drug the longest." That resulted in "fraudulent" claims being filed in Medicaid and potentially compromised quality of care, the suit argues, with the pharmacies launching aggressive physician and patient outreach to promote the drug, while downplaying its risks.
"BioScrip employees made thousands of calls to Medicaid recipients in Maryland and other states from a central call center to encourage them to refill Exjade prescriptions or resume taking Exjade," according to the suit.
The BioScrip employees were given a list of talking points to use pitching the drug to patients that bypassed a number of significant risks, according to the suit. Exjade "can cause some discomfort initially, but it usually resolves over time," the employees told patients -- without mentioning the liver, kidney and GI problems that some patients taking the drug experience, according to the suit.
The alleged arrangement "enabled Novartis to have BioScrip perform marketing tasks to increase Exjade sales behind the facade of patient-oriented clinical activities run by an independent healthcare provider," the attorneys argue.
The suit, demanding a jury trial, is filed in the U.S. District Court for Southern New York. Between the 27 states and the federal government, a settlement could end up reaching into the millions of dollars.
Between 2007 and 2012, New York's Medicaid program spent more than $15 million on Exjade prescriptions filed by BioScrip. In Maryland, the Medicaid program spent more than $500,000
Novartis is disputing the allegations and defending what the company calls medication education and adherence programs.
"We believe that adherence efforts help patients manage their disease and that specialty pharmacies play a key role in these patient medication adherence efforts and in ultimately improving outcomes," said André Wyss, president of the Swiss company's American unit, in a media statement.
"Government agencies most involved in U.S. healthcare policy have recognized that adherence efforts improve care and reduce costs."