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Friday
Apr282017

South Korea fines Novartis $48 million for doctor kickbacks

South Korea Thursday fined Swiss pharma Novartis $48.3 million for paying doctors kickbacks to prescribe the company's drugs.

The Ministry of Health and Welfare also made a preliminary decision to suspend insurance coverage for six month on some Novartis drugs.

The ministry said it will make a final decision next month, Reuters reported.

In April 2016, Novartis said Korean prosecutors had launched a criminal investigation into allegations that "Novartis Korea utilized medical journals to provide inappropriate economic benefits to healthcare professionals."

In February last year, police in Korea raided Novartis's offices.

Local doctors received "rebates" in the form of cash and other incentives that might be construed as illegal kickbacks designed, according to FiercePharma.

In March 2916, Novartis paid the SEC $25 million to settle charges that it violated the Foreign Corrupt Practices Act when two China-based subsidiaries bribed doctors and others to prescribe its drugs.

The company gave money and gifts to doctors and other health care professionals in China. The bribes led to several million dollars in sales to China state health institutions, the SEC said.

Novartis improperly recorded the payments as travel and entertainment, conferences, lecture fees, marketing events, educational seminars, and medical studies, the SEC said.

In 2010, Novartis paid $237.5 million to resolve U.S. civil allegations over kickbacks paid to doctors to prescribe the epilepsy drug Trileptal and five other drugs. It also paid the DOJ a $185 million criminal fine for off-label marketing of Trileptal.

In South Korea, six former and current Novartis employees were charged last year with using illegal practices to sell the company's drugs. The defendants are now on trial.

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Richard L. Cassin is the publisher and editor of the FCPA Blog.