By: Christopher Parrella, Esq., CPC, CHC, CPCO
Parrella Health Law, Boston, Ma.
A Health Care Provider Defense and Compliance Firm

The Second Circuit recently reignited allegations against Novartis Pharmaceuticals Corporation, asserting that the company engaged in unlawful kickback practices through its speaker program to promote the multiple sclerosis drug Gilenya. The court’s December 27, 2024 decision partially revived a False Claims Act (FCA) qui tam action brought by whistleblower Steven M. Camburn, a former Novartis sales specialist, marking a significant development in Anti-Kickback Statute (AKS) enforcement.

Key Allegations Against Novartis

Camburn’s claims centered on three specific aspects of Novartis’ speaker program, which he alleged were designed to improperly induce physicians to prescribe Gilenya:

1. Sham Speaker Events: Holding events with few or no legitimate attendees, such as presentations exclusively to other Novartis speakers or to members of a single physician’s practice during expensive meals.
2. Excessive Compensation for Canceled Events: Physicians were allegedly paid exorbitant sums—between $20,000 and $22,500—for events that never took place, effectively serving as unlawful kickbacks.
3. Targeting High-Prescribing Physicians: Selecting speakers to reward and influence physicians who prescribed Gilenya in high volumes.

These activities allegedly resulted in Medicare Part D claims ranging from $1 million to $1.7 million per identified physician.

Court Adopts “At-Least-One-Purpose” Standard

The Second Circuit adopted the “at-least-one-purpose” rule, which evaluates whether one purpose of the alleged kickbacks was to induce referrals or prescriptions, even if other purposes existed. This aligns with precedent from other federal appeals courts and strengthens the government’s ability to scrutinize pharmaceutical marketing practices under the AKS.

The court found that Camburn’s allegations were sufficiently detailed to satisfy Rule 9(b)’s particularity requirements, citing specific examples of events, individuals involved, and financial data. These details allowed the court to infer that Novartis’ speaker program was at least partially intended to provide unlawful remuneration.

Whistleblower Protections and Broader Implications

Camburn’s case highlights the risks whistleblowers face when challenging powerful corporations. After filing his FCA action in 2013, Camburn was terminated by Novartis—a move that underscores the challenges of exposing alleged fraud. His persistence, however, has brought renewed scrutiny to Novartis’ practices.

For healthcare providers and pharmaceutical companies, this decision serves as a stark reminder of the importance of compliance with the AKS. Speaker programs must be carefully structured to avoid even the appearance of impropriety, with clear documentation of legitimate educational purposes and fair market value compensation.

Strengthen Compliance and Stay Ahead of Enforcement Trends

As federal courts increasingly adopt robust standards for evaluating AKS violations, pharmaceutical companies and healthcare providers must ensure their programs adhere to strict compliance requirements. Novartis’ case highlights the substantial financial and reputational risks of failing to comply with federal regulations.

At Parrella Health Law, we specialize in helping organizations navigate the complexities of the FCA and AKS. Whether you’re designing speaker programs, evaluating compensation structures, or responding to whistleblower claims, our team offers tailored legal strategies to mitigate risks and maintain compliance. Contact Parrella Health Law today at 857.328.0382 or email Chris directly at cparrella@parrellahealthlaw.com.