Sanofi Faces Alleged Kickback Charges

Former Sanofi CEO Chris Viehbacher is being named in a new lawsuit alleging he and other high-level Sanofi executives knowingly granted millions of dollars in kickbacks and other incentives to get the company’s diabetes medications, such as Lantus (insulin glargine), prescribed and sold. Viehbacher resigned as director of Sanofi on Oct. 29, 2014 immediately after its Board of Directors unanimously agreed to remove him as the company’s CEO.

Lantus is among many of the diabetes drugs facing mounting pricing pressures. Although the drug is slated to lose patent protection in 2015, Reuters recently reported it accounted for a third of Sanofi’s operating profit.

Diane Ponte, former Sanofi paralegal, claims she reviewed contracts wherein details of the kickbacks were laid out. She was fired from the company after going public with the scheme. The lawsuit also claims that Viehbacher was involved in the fraudulent activity, and this was one of the reasons he was fired from the company.

Ponte told CNBC the contracts were meant to influence the prescribing practices of physicians, hospitals, and retail pharmacy programs (such as Walgreens and Rite Aid) and encourage these businesses to switch patients to Sanofi's products from those of competing manufacturers.

Sanofi will be investigated for violating Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. As of Dec. 4, 2014, Sanofi declined to comment on the litigation.

Sources:
CNBC