Koster reaches settlements with drug companies

Missouri Attorney General Chris Koster’s office this week reached settlements with three drug companies for an alleged scheme that provided kickbacks in exchange for recommending the drug Exjade to Medicaid and Medicare patients.

East Hanover, N.J.-based Novartis Pharmaceuticals Corp., as well as two specialty pharmacies named as defendants in the case, agreed to pay millions to the federal government and over 40 states, according to a news release.

Novartis Pharmaceuticals’ portion is $390 million, of which $1.7 million is going to Missouri. The defendants, Accredo Health Group Inc. and BioScrip Inc., agreed to pay the federal government and states $60 million and $15 million, respectively. Missouri will receive $298,000 from Accredo and $54,000 from BioScrip.

A subsidiary of Swiss pharmaceutical company Novartis AG, Novartis Pharmaceuticals allegedly pressured Accredo, BioScrip and US Bioservices to sell Exjade - which was approved by the Food and Drug Administration for iron overload from blood transfusions - by threatening to exclude them from a closed distribution network, according to the release.

That network, which Novartis called EPASS, allegedly paid kickbacks to the three firms between 2007 and 2012.

The pharmacies allegedly were paid to underestimate the dangers and emphasize the benefits of Exjade, according to the release.

“Pharmaceutical companies necessarily have strict guidelines they must follow in marketing their drugs,” Koster said in the release. “Novartis clearly crossed the line by using incentives and threats for pharmacies to increase sales of one of its drugs.”