Novartis, aiming to clean up its rep, sets aside $700M for kickback settlement

With nearly decade-old bribery charges hanging over its head, Novartis has been eager to wriggle out of U.S. prosecutors’ crosshairs. Now, a settlement in the case appears to be in the works—and it could cost Novartis close to a billion dollars.

The Swiss drugmaker has set aside $700 million for a possible settlement in an eight-year-old whistleblower suit accusing the company of bribing U.S. physicians to boost subscriptions of the company’s drugs, including hypertension med Lotrel and diabetes drug Starlix.

"Consistent with our efforts to resolve legacy compliance-related allegations, we are engaged in settlement discussions to resolve a civil suit challenging speaker programs and other promotional events conducted from 2002 through 2011," Novartis spokesman Eric Althoff said in a statement.

Wrapping up the long-running kickback suit could go a long way toward cleaning up Novartis’ tarnished reputation stateside and abroad, a serious initiative for CEO Vas Narasimhan since his elevation to the post in 2018.

In mid-June, an accidental court filing from federal prosecutors said Novartis was making "significant progress" toward a settlement in the lawsuit, which accused the drugmaker of shelling out millions to doctors through sham educational events.

Among some of the most eyepopping claims in the suit were Novartis sales execs treating doctors to $10,000 dinners at expensive New York seafood restaurants and wild nights out at Hooters. In one instance, Novartis held one of its speaker events aboard a fishing boat, allegedly without any educational material in tow.

Also Thursday, Novartis upped its annual sales forecast to mid- to-high-single-digit growth on the back of stronger-than-expected sales in the first half. The drugmaker posted $11.8 billion in net sales, a 4% increase from the previous year.