A newly unsealed whistleblower lawsuit accuses Novartis and Genentech of being at the center of a decades-long kickback scheme to promote their immunology med Xolair across dozens of states.
Whistleblowers represented by Pharma Integrity LLC filed the suit against a handful of named pharma companies including Novartis, Genentech, Sanofi, Regeneron, AstraZeneca, Amgen and GSK in January on behalf of 30 states and Washington, D.C. The lawsuit was unsealed earlier this month by U.S. District Court Judge Michelle Williams, as two states (Maryland and Florida) have now declined to intervene in the case, meaning that the seal on the filing can lift and be served to the pharma companies involved by July 20. The remaining state governments are “not intervening at this time,” according to the update.
According to the 143-page suit, Novartis and Genentech illegally boosted prescriptions of Xolair and later helped its “successor biologics” including Sanofi and Regeneron’s Dupixent, AZ’s Fasenra, Amgen and AZ’s Tezspire and Genentech’s Raptiva and Pulmozyme starting in 2003 through illegal kickbacks, off-label promotional messaging, false Medicare coverage instructions and other actions using several specialty pharmacies across the U.S. such as Walgreens, Express Scripts, CVS and others.
In exchange for the specialty pharmacies overriding codes, falsifying documentation and other illegal routes to accelerate Xolair claims, the pharmacies allegedly received office equipment and computers, “lavish dinners,” sports events and more incentives. Genentech and Novartis also allegedly used disease-specific co-pay charities as “kick-back pass-throughs” to broaden market share, the lawsuit claims, facilitating thousands of false claims to Medicare and state Medicaid programs.
The fraudulent scheme speaks to “deliberate, systemic violations of the Anti-Kickback Act and reckless disregard for Medicare and Medicaid rules,” the lawsuit says. The whistleblower plaintiff group is made up of five former employees with direct knowledge of the companies alleged activities across more than 20 states. In their suit, the unnamed whistleblowers testify to their specific experience overseeing Xolair sales and the “pervasive misconduct” involved.
“The above-described practices by Defendants have caused the submission of hundreds of millions, if not billions, of dollars’ worth of false and fraudulent claims to Government Health Care Programs for reimbursement,” Pharma Integrity explains.
Novartis and Genentech did not immediately respond to Fierce Pharma’s request for comment.
Novartis and Genentech’s Xolair playbook was allegedly adopted by Sanofi, Regeneron and the others for their own drugs, in some cases using the same speaker networks, sales-force guidance and incentive structures to boost their biologics. These promotions cause “exponentially greater damages than traditional drug fraud” due to the nature of the chronic disease drugs, meant for long-term or lifetime use, the lawsuit explains.
For its purported violations under the False Claims Act, the suit seeks trebled (tripled) damages for each state, plus civil penalties for each false claim.
Xolair was first approved as an asthma treatment in 2003 and has since stacked on a collection of other indications that cover nasal polyps, allergic asthma, chronic idiopathic urticaria and, most recently, food allergies. Last year, Novartis reported $1.7 billion in sales of the drug, up 5% from 2024. Genentech’s parent company Roche, which markets the drug in the U.S., logged $3.7 billion (3.08 billion Swiss francs) in U.S.-specific sales (PDF). The company still counts Xolair as one of its five highest growth drivers, with steadily increasing sales despite its lengthy tenure on the market.
The partners’ Xolair promotion has been challenged in court before, with a 2006 whistleblower lawsuit leveraging many of the same allegations before being dismissed in 2015 after a judge determined the evidence wasn’t strong enough to prove False Claims Act violations.