Arkansas to receive $612,000 in Medicaid fraud settlement

Arkansas Attorney General Leslie Rutledge said she has reached a settlement with Novartis Pharmaceuticals Corp. to resolve kickback claims in a case involving the U.S. government and 40 states. Novartis is accused of providing kickbacks to certain specialty pharmacies in exchange for recommending the drug Exjade to Medicaid and Medicare patients.

While the total settlement is $390 million, Arkansas will receive $612,961.60 as part of the agreement.

“Novartis used contests and threatening tactics to encourage select pharmacies to provide inaccurate information to patients to encourage the use of a drug they were marketing,” said Rutledge. “Patient health and well-being should always be the top priority for pharmaceutical companies and pharmacies. This settlement, which holds Novartis accountable, is the largest Medicaid fraud settlement of the year and will be deposited into the Arkansas Medicaid Program Trust Fund.”

Novartis, which is headquartered in New Jersey, is a subsidiary of the Swiss pharmaceutical company Novartis AG.

The settlement alleges that Novartis paid kickbacks to three specialty pharmacies – BioScrip, Accredo and US Bioservices – in order to inflate low refill rates for Exjade. In the course of the scheme, Novartis pressured the specialty pharmacies by threatening to exclude them from a distribution network or to reduce the number of patient referrals they received.

The settlement also resolved allegations that Novartis paid kickbacks to other specialty pharmacies to promote the drug Myfortic to doctors. Myfortic is an immunosuppressant that is approved for use in kidney transplant patients. BioScrip Inc. and Accredo Health Group Inc. have already agreed to pay $15 million and $60 million, respectively, to resolve claims that they accepted kickbacks from Novartis to promote Exjade.

The settlements were negotiated by a team of states led by representatives from the Offices of the Attorneys General for California, Indiana, New York, Oklahoma, Washington and Wisconsin, according to a press release.