On the eve of a closely watched trial that was to have begun next week, Novartis has agreed to pay $390 million to settle charges of paying kickbacks to boost sales of various drugs. Prosecutors say the scheme caused federal healthcare programs to overpay for the company’s medicines. But will Novartis executives suffer any consequences?
Generally, the federal government resorts to large fines against companies, although, there are recent signs the government might be changing its approach toward recalcitrant executives. The US Department of Justice issued a memo instructing staff to pursue executives for wrongdoing. And the US Department of Health & Human Services formed a team to ban executives from doing business with federal healthcare programs. The Novartis deal isn’t finalized, but some say the government should use this case to send a message.