Daniel and Peter Luger did it, but the incentives for doctors didn't end with these New York restaurants.
Hooters had fishing junkets, golf trips and round-table events. And then there were the six-figure fees that Novartis Pharmaceutical Corp. paid to several doctors who had written thousands of prescriptions for the company's cardiovascular and diabetes medications.
After Novartis admitted that it had used an extensive kickback program to influence doctors prescribing certain medications for almost a decade, it will pay $ 678 million to settle a fraud lawsuit, the New York prosecutor said Wednesday with.
Most of the medications prescribed by doctors who have had setbacks have been used to treat hypertension and, by comparison, include Lotrel, Diovan, Exforge, Tekturna, Valturna and Tekamlo. The doctors who received the setbacks also prescribed Starlix, which is used to treat type 2 diabetes.
Prosecutors said Novartis violated a federal law to prevent setbacks, leading to fraudulent prescription claims from Medicare, Medicaid, and the U.S. Department of Veterans. The company gained an edge over competitors, but there were no allegations that the medication was not needed by the patients to whom it was prescribed, the prosecutor said.
“For more than a decade, Novartis has spent hundreds of millions of dollars on so-called speaker programs, including speaking fees, exorbitant meals, and top-quality alcohol that were nothing more than bribes, to get doctors across the country to prescribe Novartis® medication. Audrey Strauss, the acting US attorney for Manhattan, said in a statement. "These cash payments and other wasteful treats affect doctors' duty to choose the best treatment for their patients and increase drug costs for everyone."
The settlement ended a whistleblower lawsuit filed in 2011 by a former Novartis sales representative who had joined the federal government in 2013. It was not the first time that Novartis was accused of having set back doctors. The company settled another lawsuit in 2010.
Novartis officials said on Wednesday that the company had undergone a transformation and approved new corporate integrity commitments in the U.S. by 2025. They said that Novartis had moved away from the traditional model of the spokesperson program that had been brought under federal control.
"Today’s comparisons are in line with Novartis’s commitment to solving and learning from existing compliance issues," said Dr. Vasant Narasimhan, the company's CEO, in a statement. “Today we are a different company – with new leadership, a stronger culture and a greater commitment to ethics, which is anchored in the heart of our company. It was clear to me that I never want us to achieve commercial success at the expense of our values - our values must always come first and are the basis for everything we do. "
The public prosecutor said that the company, which is part of the Swiss pharmaceutical manufacturer Novartis AG, provided doctors with cash, meals, alcohol, hotels, travel and entertainment as part of a sham speaker program that ran from 2002 to 2011.
Doctors were often not obliged to give presentations on the so-called lecture obligations, for which they received fees by comparison. At the events there were "minimal" discussions about medicine.
A doctor who wrote more than 8,000 prescriptions for Novartis drugs received fees of $ 320,000, according to the settlement, which did not name the doctor. Another doctor who wrote 9,000 prescriptions received fees of $ 220,000, and a third doctor who wrote 3,600 prescriptions received more than $ 200,000.
"Novartis not only created incentives for physicians to hold these lectures, but physicians also bribed to write more prescriptions for the company's medicines to give Novartis an edge over competitors in their field," said William F. Sweeney Jr ., the deputy director of the FBI's New York office said in a statement. “Greed has replaced the responsibility that the public expects from medical professionals, not to mention the possibility of eroding confidence in the pharmaceutical industry as a whole. This behavior was reprehensible and dishonest. "