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Westchester pharmacy must pay $15 million in alleged kickback scheme

NEW YORK – The state Attorney General’s Office has filed a lawsuit alleging that Novartis Pharmaceuticals Corporation of New Jersey paid kickbacks to a Westchester County pharmacy to boost sales of the company’s iron-reduction drug, Exjade, which is often prescribed to patients who need regular blood transfusions.

An agreement in principle was also announced with BioScrip, Inc., in which the Elmsford pharmacy will pay $15 million to cover costs to Medicaid and Medicare nationally for excessive Exjade prescriptions.  Under the agreement, BioScript will pay $895,000 to resolve kickback claims related to New York Medicaid recipients.

The state lawsuit charges that the kickback scheme began in 2007 when Novartis officials had become concerned that patients taking Exjade were discontinuing its use because of harmful side effects. The kickbacks were designed to get the pharmacy to keep patients on the drug as long as possible.

The complaint alleged that as part of the scheme, BioScrip employees made thousands of calls to Medicaid recipients in New York and other states from a central call center in Ohio encouraging them to refill Exjade prescriptions or resume taking the drug.

The complaint alleged that BioScrip employees downplayed the side effects of Exjade in those calls.