Former Novartis sales rep gets $109M for blowing the whistle on doctor kickbacks

Novartis headquarters
Oswald Bilotta, the whistleblower in a Novartis doctor kickback case, stands to get $109.4 million from a $678 million settlement the Swiss drugmaker recently reached with the U.S. government. (Novartis)

Oswald Bilotta blew the whistle on Novartis’ alleged doctor kickback scheme while working as a sales rep at the Swiss drugmaker, leading to U.S. government intervention in a lawsuit in 2013.

Now, as Novartis has agreed to resolve the case by paying a $678 million settlement, Bilotta stands to get $109.4 million, plus additional interest, for his role as the whistleblower, according to a court filing on Wednesday.

The award represents a handsome 18.5% of the amount the government is getting from the Novartis settlement, net of $38.4 million in forfeiture and $48.2 million for state Medicaid claims.

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According to the complaint, Novartis set up sham speaker programs as venues for paying physicians kickbacks to boost scripts of its drugs Lotrel, Valturna, Starlix, Tekturna, Tekamlo, Diovan and Exforge. These events often involved lavish meals, fishing trips and other entertainment, according to the suit.

Bilotta filed his whistleblower case under the False Claims Act in late 2011, and it involved him wearing a wire at the request of law enforcement while still employed by Novartis to record bribes he paid to doctors. U.S. prosecutors intervened in 2013.

After years of legal battle, Novartis settled before trial. Under the settlement, Novartis made “extensive factual admissions,” the U.S. Department of Justice said.

RELATED: With new settlement, Novartis has shelled out $1.3B for kickbacks, bribery and price fixing this year

In addition, the company entered into a corporate integrity agreement with the HHS’ Office of Inspector General, in which it pledges to reduce the number of paid speaker programs and limit the maximum money it may spend on such events.

The case marks the latest in Novartis’ ethics and compliance breaches. Separately, it’s paying $51.25 million to resolve claims that it channeled money through charities to Medicare patients for covering copays on its multiple sclerosis drug Gilenya and cancer med Afinitor. Federal anti-kickback law prohibits such payments under federally funded healthcare programs.

Prior to that, Novartis agreed to pay $347 million to end probes into its overseas sales conduct. Its Sandoz division shelled out $195 million to settle antitrust claims it participated in an industrywide generic price-fixing scheme.

During a conference call on the company’s second-quarter performance, CEO Vas Narasimhan noted that those matters were primarily related to events between 2002 and 2015—before his tenure.

Since then, the company has made several changes under the goal of “building trust with society.” It elevated its ethics and compliance officer to the rank of executive committee and is also linking ethics to executive pay and launching new code of ethics.

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