Novartis Settles Sales Rep Overtime Suit Rather Than Await Supreme Court Ruling
This article was originally published in The Pink Sheet Daily
Novartis agrees to pay $99 million to resolve a class action on behalf of 7,700 current and former sales representatives. The company changed the duties of its reps and cut their work hours after the suit was filed.
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Court rules that reps’ nonbinding commitments from physicians to prescribe drugs constitute a sale and thus make them outside sales employees who are exempt from overtime. Court also rebukes Labor Department’s policy change outside of rulemaking.
The high court will hear oral arguments on whether sales reps sell drugs or just promote them; Thomas Goldstein, who won a victory for PhRMA in Sorrell v. IMS, is representing the sales reps and former Solicitor General Paul Clement is arguing for GlaxoSmithKline.
With the loss of exclusivity for its blockbuster heart drug, Diovan, coming in September, management focused on the company’s long-term prospects during a fourth quarter financial update.