Novartis to pay $23M to settle claims it used charity payments as kickbacks

Pharma giant Novartis agreed to pay $23 million to settle allegations that it used charities to pay kickbacks to Medicare patients to cover their out-of-pocket costs, according to a STAT news report.

The agreement, disclosed in the drugmaker's latest annual report, ends a probe opened three years ago by the U.S. attorney in Boston.  Novartis is accused of donating money to independent foundations that help Medicare beneficiaries pay their out-of-pocket costs for its  Gleevec cancer medication and Gilenya multiple sclerosis treatment.

A Novartis spokesman told STAT the payment agreement was a "mutually acceptable resolution" and that "independent copay foundations are legitimate charitable foundations that help patients cover out-of-pockets costs associated with their care."

Federal prosecutors are more aggressively pursuing drugmakers for donating to programs that provide patients with free medication or copay assistance. Most recently, Alexion Pharmaceuticals disclosed it paid $13 million to resolve claims concerning payments to patient organizations.

Read the full report here.


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