Novartis
Zolgensma's data scandal, sham speaker programmes, foreign bribery and generic price-fixing
Novartis, the Swiss drug giant, has one of the longest US enforcement records of any major drugmaker. In the US it has paid hundreds of millions of dollars over kickbacks and off-label marketing, disclosed manipulated data in the application for the world's most expensive drug, settled foreign bribery charges, and through its former generics arm Sandoz been drawn into the largest generic price-fixing case in US history. This article sets out each of these episodes and how Novartis has responded.
Questions
Why is Novartis considered a controversial drugmaker in the US?
A $422 million off-label settlement, a $678 million sham speaker-programme settlement, a $347 million foreign bribery case, a generic price-fixing indictment and a data-manipulation disclosure in a landmark gene therapy approval — spanning two decades.
Novartis has been the subject of repeated federal enforcement over two decades, which critics describe as recidivism and the company describes as legacy conduct it has since reformed. The list includes a $422 million settlement in 2010 over off-label marketing of the epilepsy drug Trileptal and five other drugs; a $390 million settlement in 2015 over kickbacks involving Myfortic and Exjade, without admitting liability; a $678 million settlement in 2020 over sham speaker programmes; a $51 million settlement over copay charities; and roughly $347 million to resolve foreign bribery charges. It also carries the Zolgensma data-manipulation episode of 2019.
Q2What were Novartis's "sham" speaker programmes?
The government alleged tens of thousands of speaker events from 2002 to 2011 were really just entertainment — fishing trips, meals at Hooters, restaurant bills of $3,000 for two — with the same doctors rotating who spoke and who collected the fee.
In July 2020 Novartis agreed to pay $678 million to resolve a whistleblower lawsuit, joined by the government, over its speaker programmes. According to BioPharma Dive, between 2002 and 2011 Novartis sales representatives hosted tens of thousands of speaker programmes and roundtables, supposedly to share medical information, but many were held at expensive restaurants and focused on entertaining high-prescribing doctors. The government cited fishing trips, meals at Hooters and restaurant bills of $3,000 for two people.
Q3What was the Novartis copay charity case?
Novartis allegedly paid $51.25 million through three foundations to cover Medicare copays for its MS drug Gilenya and cancer drug Afinitor — shielding patients from its own price increases while Medicare paid the remainder.
On the same day as the speaker-programme settlement, Novartis agreed to pay $51.25 million to the US Attorney in Massachusetts to resolve allegations that it illegally paid, through three foundations, the copays of Medicare patients taking its multiple sclerosis drug Gilenya and its cancer drug Afinitor. Federal law bars manufacturers from covering Medicare copays for their own products, because copays are intended to create price sensitivity.
Q4What happened with the Zolgensma data manipulation?
AveXis knew of manipulated animal-testing data before the FDA approved Zolgensma in May 2019 — but waited until June 28 to tell regulators, more than a month after approval. The FDA said it would likely have delayed the process had it known.
Zolgensma is a one-time gene therapy for spinal muscular atrophy, approved in May 2019 at a list price of $2.125 million. On August 6, 2019, the FDA revealed that Novartis's AveXis unit had told it on June 28, after approval, about manipulated data from animal testing submitted in the application, and that AveXis had known about the problem before approval.
Q5What foreign bribery charges did Novartis settle?
Novartis subsidiaries in South Korea, Vietnam and Greece made improper payments to healthcare providers between 2012 and 2016, while Alcon's China operations used forged contracts leading to more than $50 million in write-offs — total resolution cost roughly $347 million.
In June 2020 Novartis and its former eye-care unit Alcon resolved US Foreign Corrupt Practices Act investigations for roughly $347 million. According to the SEC, Novartis subsidiaries in South Korea, Vietnam and Greece made improper payments to health care providers between 2012 and 2016 in exchange for prescribing Novartis or Alcon products, and Alcon's China operations lacked adequate controls, using forged contracts that led to more than $50 million in write-offs.
Q6How is Novartis connected to the generic drug price-fixing scandal?
Through Sandoz, its generics division until 2023, which agreed to a $195 million criminal penalty for price-fixing — and was later accused by state attorneys general of being shielded from liability through a fraudulent asset transfer before the spin-off.
Through Sandoz, which was Novartis's generics division until it was spun off in 2023. In March 2020 Sandoz agreed to a $195 million criminal penalty to resolve federal charges of price-fixing, bid-rigging and market allocation for generic drugs, including collusion with Teva on medicines for brain cancer, cystic fibrosis and hypertension.
Q7Why was Zolgensma's price itself controversial?
At $2.125 million, Zolgensma was the first drug priced above $1 million in the US. Internal documents showed executives floated $4–$5 million before launch, and the underlying science built on more than $450 million in NIH and charity-funded research.
At $2.125 million, Zolgensma was the first US drug priced above $1 million and the world's most expensive medicine at launch. ProPublica reported that Novartis assembled academics and consultants to support a value-based price, that executives publicly floated $4 million to $5 million before launch, and that the underlying science was built on more than $450 million in NIH investment in SMA research and charity-funded work. Novartis also received a priority review voucher worth around $100 million.
Q8Has Zolgensma had safety problems?
In August 2022 Novartis reported the first two deaths from acute liver failure after Zolgensma treatment — foreshadowing the broader concerns about liver toxicity with AAV gene therapies that later surfaced dramatically with Sarepta's Elevidys.
Yes. Acute liver injury was a known risk listed on the label, but in August 2022 Novartis reported the first two deaths from acute liver failure, in patients in Russia and Kazakhstan, five to six weeks after infusion and following tapering of the steroids given alongside treatment.
Q9Has Novartis changed its practices?
Novartis points to a new corporate integrity agreement and virtual-only speaker programmes — but the state fraudulent-transfer allegations over Sandoz arose after these pledges, and a 2019 FDA inspection found AveXis personnel had been aware of the data problem since January 2018.
Novartis points to a number of reforms. It accepted a new corporate integrity agreement with the HHS Inspector General as part of the 2020 speaker-programme settlement, including reductions in how much it may spend on speaker programmes, and committed to shift medical education to digital formats. After the Zolgensma episode, the CEO pledged greater transparency on data integrity and described the problem as isolated. The FCPA resolution required three years of self-reporting on compliance.
Q10What restrictions did Novartis accept on its speaker programmes?
The 2020 settlement required factual admissions and barred Novartis from holding speaker events at restaurants, serving alcohol, including non-prescriber guests, and required all future programmes to be virtual.
The 2020 settlement was notable for both its admissions and its restrictions. As is typical for civil settlements with the Southern District of New York, Novartis was required to admit and accept responsibility for certain conduct. The government had highlighted that attendees were often allowed to bring spouses or guests who were not prescribers, received meals and excessive alcohol at expensive restaurants, and in thousands of cases the same group of doctors met repeatedly, rotating who spoke and who was paid.
Q11What is the key takeaway about Novartis?
Novartis illustrates that a scientifically productive company can also carry repeated enforcement across multiple categories — off-label promotion, kickbacks, foreign bribery, generic price-fixing and a gene therapy data disclosure failure — spanning several leadership teams.
Novartis is a large, scientifically productive company whose US record includes an unusually wide range of enforcement: off-label promotion, doctor kickbacks, copay-charity kickbacks, foreign bribery, generic price-fixing through a subsidiary and, in Zolgensma, a disclosure failure in a landmark approval. Most matters were resolved by settlement, some with admissions.