Novartis wants to claw back $209m in ‘overpayments’ to Genentech

Roche subsidiary  Genentech received $209.5 million in unnecessary payments from  Novartis Pharma for a patent licensing deal and is now refusing to return the payment, the Swiss pharma giant has alleged in a redacted complaint.

Novartis has asked for damages payments and a declaratory judgment related to an unspecified patent licensing agreement involving its arthritis treatments Ilaris and Cosentyx.

The complaint to the  US District Court for the Northern District of California was published on Thursday, June 24.

Novartis first entered into the licence agreement with Chiron Corporation in June 2005. After Chiron was incorporated into Genentech in 2006, it inherited Chiron’s rights and obligations of the agreement.

It was not until after the expiration of the agreement that Novartis said that it had “mistakenly” overpaid Genentech, Novartis said in the redacted complaint.

Genentech allegedly knew about the overpayments but “continued to demand, accept and retain” them, never informing Novartis that the overpayments were not owed.

Novartis had requested the return on the overpayments but Genentech allegedly refused, even though “it had no legal basis for retaining such funds” said Novartis.

In the complaint, Novartis accuses Genentech of breach of written contract, breach of the implied covenant of good faith and fair dealing, quasi-contract claim based on unjust enrichment, money had and received, and mistaken receipt.

For each of these claims, Novartis seeks further compensatory damages from Genentech to be determined at trial.

In the documents, Novartis said that “numerous leading biotechnology and pharmaceutical companies have been party to these cases” related to the damages payments.