Swiss drugmaker Novartis Pharmaceuticals Corp. and federal prosecutors are at loggerheads over discovery in a whistle-blower suit alleging company kickbacks to physicians. The company recently said the probe has “exploded” in its size and scope.
In November, federal prosecutors asked for sign-in sheets, educational materials and receipts for roughly 79,000 promotional gatherings for physicians that it called “sham” events that are “tainted by kickbacks.” Novartis says the speaker programs were legitimate events educating physicians about their pharmaceutical products. The company is asking a federal judge in New York City to protect the company from having to provide the requested troves of information.
The government decided to join the whistle-blower suit last April.
Novartis attorneys claimed in a letter last week that the government's request for information would be difficult given that records of the events—many of which occurred over a decade ago—would be in the individual files of more than 5,400 sales representatives. In addition, they argue that the request violates the parties' agreed-on discovery protocol, under which Novartis wouldn't have to muster up records for more than 150 sales reps.
The government has argued that many of the events took place in venues that are “not even conducive to an educational event,” including a Hooters restaurant, and that they included “lavish meals” that could be considered kickbacks. Program slides weren't presented at every event, and physicians sometimes were paid an honorarium even when the event was not held, prosecutors allege.
Prosecutors wrote in a letter Monday that Novartis had not previously communicated that it would need to search through records of individual sales reps for the requested information. They said they understood the company would have its own backup data, including slides and sign-in sheets. Prosecutors said Novartis last month refused to produce any event records at the corporate level in response to an inquiry for 25,000 of the events.
“The Government is not seeking the underlying records for all (Novartis) promotional events or even all allegedly sham events,” the prosecutors wrote. “Rather, it is seeking only a subset of the records, and it is hard to conceive of discovery more centrally relevant to the Government's claims in this case.”