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Novartis Agrees To Pay $678 Mln To Settle U.S. Kickback Charges

Novartis AG (NVS) agreed to pay $678 million to settle U.S. government charges it paid illegal kickbacks to doctors to induce them to prescribe its cardiovascular and diabetes drugs, the U.S. Department of Justice said in a statement.

The $678 million settlement includes $591.44 million in damages to the U.S. government, a $38.41 million forfeiture for violating an anti-kickback statute and $48.15 million to various States.

In addition, the Swiss drugmaker agreed to pay $51.25 million to settle an investigation related to the company's support of certain independent charitable co-pay foundations from 2010 to 2014. The company provisioned for the settlement.

As part of the settlements, Novartis has agreed to new corporate integrity obligations in the U.S. through 2025.

The U.S. alleged that between 2002 and 2011, the company hosted tens of thousands of speaker programs and related events under the guise of providing educational content, when in fact the events served as nothing more than a means to provide bribes to doctors.

The U.S. also alleged that some of the so-called speaker events never even took place and the speaker was simply paid a fee in order to induce the speaker to prescribe the company's drugs.

The company also made extensive factual admissions in the settlement and agreed to strict limitations on any future speaker programs, including reductions to the amount it may spend on such programs.

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