NEW YORK, Dec 27 (Reuters) - A U.S. appeals court on

Friday revived a whistleblower lawsuit accusing the Swiss

drugmaker Novartis of paying illegal kickbacks to

doctors to induce them to promote its blockbuster multiple

sclerosis drug Gilenya.

In a 3-0 decision, the 2nd U.S. Circuit Court of Appeals in

Manhattan said the whistleblower Steven Camburn can try to prove

that Novartis violated the federal False Claims Act by holding

"sham" speaker events to boost Gilenya sales.

Camburn, a former Novartis sales representative, said the

drugmaker paid doctors thousands of dollars and treated them to

dinners at high-end restaurants to speak at purportedly

educational events that were actually social in nature.

He said this caused government health insurance programs

including Medicare Part D, Medicaid and TRICARE to be defrauded

when doctors and pharmacies submitted reimbursement claims for

Gilenya that were tainted by kickbacks.

Circuit Judge Myrna Perez said Camburn sufficiently alleged

that Novartis' holding speaker events with few or no legitimate

attendees, paying doctors excessively for canceled events, and

selecting speakers to encourage prescription writing created a

"strong inference" that the drugmaker intended to induce fraud.

She agreed with seven other federal appeals courts that in

whistleblower cases, defendants violate the federal

Anti-Kickback Statute when at least one purpose of their

compensation is to induce purchases of federally reimbursable

healthcare products.

Novartis and its lawyers did not immediately respond to

requests for comment. Lawyers for Camburn did not immediately

respond to similar requests.

The False Claims Act lets whistleblowers sue on behalf of

the government, and share in recoveries.

Friday's decision vacated a Sept. 2022 dismissal by U.S.

District Judge Kimba Wood in Manhattan, and returned the case to

her. Camburn sued Novartis in May 2013, about 2-1/2 years after

the drug won federal regulatory approval.

Gilenya sales have been declining because of competition

from generic versions.

Sales fell to $925 million in 2023 from $3.22 billion in

2019, and totaled $443 million in the first nine months of 2024.

Novartis agreed in 2020 to pay more than $729 million to

settle U.S. government charges it paid illegal kickbacks to

doctors and patients to boost drug sales.

The case is US ex rel Camburn v. Novartis Pharmaceuticals

Corp, 2nd U.S. Circuit Court of Appeals, No. 22-2708.