Novartis resolves legacy litigation matters, finalizing settlement of speaker program litigation with Government in the US and positioning company for the future by fully scaling its next-generation digital engagement technologies

Company finalizes USD 678 million settlement relating to suit challenging speaker programs and other promotional events conducted from 2002 through 2011 in the US as well as USD 51.25 million related to the company’s support of certain independent charitable co-pay foundations from 2010 to 2014

As part of these settlements, Novartis has agreed to new corporate integrity obligations in the US through 2025

Novartis embarks on new approach to meet the educational needs of physicians by setting new standard through digitally enabled education programs to support better outcomes for patients

Basel, July 2, 2020 - Novartis has finalized its previously disclosed agreement with the US Attorney’s Office for the Southern District of New York, the New York State Attorney General, and relator Oswald Bilotta resolving a civil suit challenging speaker programs and other promotional events conducted from 2002 through 2011 by Novartis Pharmaceuticals Corporation in the US. As part of this settlement, Novartis will pay USD 678 million and has agreed to new corporate integrity obligations with the Office of Inspector General (OIG) of the US Department of Health & Human Services that will change how the company delivers peer-to-peer programs in the US. As it has done over the past several years, Novartis will continue to evolve its approach to peer-to-peer medical education. The company fully provisioned for this settlement in July 2019.

Novartis expects that its new initiatives will resonate more with the way people learn in the digital era. Consistent with its already substantial efforts to fully scale its next-generation digital engagement technologies, Novartis will transition its physician education programs predominantly to digital formats, and use paid external physicians only in limited circumstances. The use of digital tools will allow Novartis to offer rich and interactive content, in some cases including peer-to-peer instruction, which physicians can engage with at their convenience.

Vas Narasimhan, CEO of Novartis, said: "Today’s settlements are consistent with Novartis commitment to resolve and learn from legacy compliance matters. We are a different company today-with new leadership, a stronger culture, and a more comprehensive commitment to ethics embedded at the heart of our company. I have been clear that I never want us to achieve commercial success at the expense of our values-our values must always come first and are the foundation of everything we do. With these agreements we mark an important milestone on our journey to build trust with society as we continue reimagining medicine to improve and extend lives all around the world."

While Novartis is moving away from the traditional speaker program model in the US, peer-to-peer medical education remains an important aspect of the Company’s educational objectives as it helps physicians keep pace with medical innovation and make prescription decisions in the best interest of patients. Since 2011, Novartis has enhanced its peer-to-peer medical education programs to meet the evolving expectations of the industry and stakeholders around the world. Going forward, Novartis will set the standard by embracing new, digitally enabled education programs that will support better outcomes for patients.

Novartis will transform its sponsored peer-to-peer medical education in the US by:

In addition, Novartis has finalized its previously disclosed agreement with the US Department of Justice and the US Attorney’s Office for the District of Massachusetts to resolve an investigation related to the company’s support of certain independent charitable co-pay foundations (ICCFs) from 2010 to 2014. As part of this settlement, Novartis will pay USD 51.25 million and has agreed to additional corporate integrity obligations with OIG to further enhance its controls relating to its interactions with ICCFs. The company provisioned for this settlement.