Novartis expects to pay $700M to settle bribery suit

By Health CareFOXBusiness

Health care in focus as 2020 Democrats campaign in Iowa

New Leaders Council senior fellow Richard Fowler and Fox News contributor James Freeman discuss former Vice President Joe Biden’s health care plan and Sen. Kamala Harris’ (D-Calif.) plan to lower drug prices.

Novartis is poised to pay up to $700 million to settle allegations that the drugmaker used perks like expensive dinners to lure doctors to prescribe its medications.

Continue Reading Below

TickerSecurityLastChange%Chg
NVSNOVARTIS AG89.10+0.10+0.11%

The Switzerland-based firm has denied any wrongdoing in the lawsuit that stems from events held between 2002 and 2011, which the company marketed as educational sessions but the federal government says violated anti-kickback laws.

Still, Novartis is setting aside the funds as part of its “efforts to resolve legacy compliance issues,” CEO Vas Narasimhan said on Thursday.

“Right now we’re working in settlement discussions to resolve the civil suit,” he told investors on the firm’s second-quarter earnings call.

MORE FROM FOXBUSINESS.COM...

Outside of its legal challenges, Novartis is facing pressure over its newest treatment for spinal muscular atrophy. Known as Zolgensma, the drug for babies has a price tag of $2.1 million. To reduce the cost, the firm is offering insurers an option to pay for the medication over five years.

Novartis reported profits of $2.1 billion, or $1.34 per share, in the three months through June, a 73 percent decline year-over-year largely due to GlaxoSmithKline’s 2018 purchase of Novartis’ stake in the drugmaker’s consumer health unit.

CLICK HERE TO GET THE FOX BUSINESS APP

Overall, sales rose 4 percent to $11.8 billion. Novartis increased its full-year outlook on the positive results, telling investors that sales are expected to grow in the “mid to high-single digits,” while operating income is predicted to experience double-digit percentage growth.