Alleged Kickbacks at Drug Company Trample Integrity and Prove Costly

May 9th, 2013
Jim Thomas

The lesson is well known yet frequently ignored. Avoiding the timeless tenets of integrity can result in costly fines, penalties, and huge lawyer fees. The lesson holds, in particular, for a company with a high-profile in the market place.

This time civil investigators claim the breaches occurred at Novartis Pharmaceuticals. Two lawsuits filed in Federal Court aver; (1) the company made fraudulent kickbacks to promote sales of its products; (2) that it provided illegal rebates and discounts to 20 or more influential pharmacies for persuading doctors and institution to switch from other drugs to Myfortic, a Novartis medication. Novartis says it will defend the allegations.

Three years ago Novartis faced similar charges. Then the accusations were; (1) that it promoted drugs to health care professionals for uses unapproved by the FDA; (2) that it provided kickbacks to physicians in the form of entertainment, appointments to advisory boards or speaker programs. Some activity it was claimed was contrary to Novartis’s own internal policies. Novartis denied all allegations then and now. However it settled with the government in the earlier suit with a payment of $422.5 million.
In addition, Novartis was also required to sign a “Corporate Integrity Agreement.” Its terms, in part, ensure compliance with regulations that apply to drug promotions.

These debacles and their attendant costs are preventable. How? With conduct and procedures that place a premium on Performance with Integrity. A few of its feature include:
1. Adoption of a Code of Integrity
2 Preaching Integrity at Meetings and Gathering
3. Awarding Personnel who Demonstrate Integrity
4. Periodic Internal Integrity Audits

An “Integrity Checklist,” “Guide for Drafting an Integrity Code”, and a “Model Code” are available at no cost from

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