Whistleblower lawsuit accuses Novartis and Genentech of decades-long kickback scheme over Xolair

Novartis (NVS) and Genentech, the Roche (RHHBY) unit, are at the center of a newly unsealed whistleblower lawsuit alleging a decades-long kickback scheme to promote their immunology drug Xolair across dozens of US states.

The suit, filed by whistleblowers represented by Pharma Integrity LLC on behalf of 30 states and the District of Columbia, also names Sanofi (SNY), Regeneron Pharmaceuticals (REGN), AstraZeneca (AZN), Amgen (AMGN) and GSK (GSK).

It was unsealed by US District Court Judge Michelle Williams after Maryland and Florida declined to intervene, clearing the way for the complaint to be served on the companies by July 20. The remaining states have not yet decided whether to join the case.

The 143-page complaint alleges Novartis and Genentech illegally boosted Xolair prescriptions from 2003 onward, and later extended the practice to what it calls "successor biologics," including Sanofi and Regeneron's Dupixent, AstraZeneca's Fasenra, the Amgen-AstraZeneca drug Tezspire, and Genentech's Raptiva and Pulmozyme. The alleged tactics included illegal kickbacks, off-label promotion, false Medicare coverage guidance and coordination with specialty pharmacies such as Walgreens (WBA), Express Scripts and CVS Health (CVS).

In exchange for overriding billing codes, falsifying documentation and accelerating claims, the pharmacies allegedly received office equipment, meals, sports tickets and other incentives. The suit also claims Genentech and Novartis used disease-specific co-pay charities as "kickback pass-throughs" to expand market share, generating what the plaintiffs describe as hundreds of millions, if not billions, of dollars in false claims submitted to Medicare and state Medicaid programs.

The five whistleblowers are former employees who say they had direct oversight of Xolair sales across more than 20 states. The complaint characterizes the conduct as deliberate and systemic violations of the Anti-Kickback Act. It seeks treble damages for each state involved, plus civil penalties for each false claim, and argues that the alleged scheme caused disproportionately large harm because the drugs are intended for long-term or lifetime use.

Novartis and Genentech did not immediately respond to a request for comment from Fierce Pharma, which first reported the filing.

Xolair, approved in 2003 as an asthma treatment, has since gained additional approvals for nasal polyps, chronic idiopathic urticaria and, most recently, food allergies. Novartis reported $1.7bn in Xolair sales last year, up five per cent from 2024, while Roche logged $3.7bn in US sales of the drug through Genentech, which markets it domestically. Roche continues to count Xolair among its five highest-growth products despite its two decades on the market.

The companies faced similar allegations in a 2006 whistleblower suit, which was dismissed in 2015 after a judge found the evidence insufficient to prove violations of the False Claims Act.