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State Wins Settlement In Kickback Scheme

California Attorney General Xavier Becerra recently announced an $11.8 million settlement against Novartis Pharmaceuticals Corporation (Novartis) related to allegations that the company engaged in a kickback scheme from January 2002 through November 2011 that impacted beneficiaries of Medicare and Medi-Cal.

Novartis was accused of violating the federal Anti-Kickback Statute and False Claims Act, as well as the California False Claims Act, by offering payment in the form of cash, meals, and honoraria to healthcare practitioners to encourage them to prescribe certain Novartis drug products, including drugs such as Lotrel, Valturna, Starlix, Tekamlo, Diovan HCT, Tekturna HCT, and Exforge HCT, Diovan, and Exforge, to recipients of Medicare and Medicaid.

“Kickbacks are illegal, they increase prices for consumers — and they cost you dearly once you’re caught. Novartis is the latest company we caught cheating,” said Attorney General Becerra. “In holding Novartis accountable, our state’s Medi-Cal recipients and our taxpayers win to the tune of over $11.8 million.”

The settlement is a result of a whistleblower case filed in the United States District Court for the Southern District of New York in 2011. As part of the agreement, Novartis is required to pay California $11.8 million, which will be split between the General Fund and Medi-Cal.

This settlement agreement is a part of the work of the California Department of Justice’s Bureau of Medi-Cal Fraud and Elder Abuse (BMFEA). Through BMFEA, the Attorney General’s office works to protect Californians by investigating and prosecuting those who perpetuate fraud on the Medi-Cal program. BMFEA also investigates and prosecutes those responsible for abuse, neglect, and fraud committed against elderly and dependent adults in the state. The Bureau regularly works with whistleblowers and law enforcement agencies to investigate and prosecute.