If state government is not able to compensate for some free power given to one section, they ask the discoms to hike the tariff for another segment to compensate for the subsidy burden, says the minister
Union power minister Jyotiraditya Scindia has lambasted at state government who are doling out free or cheaper electricity and asked them to bear the cost of such subsidies instead of burdening power distribution companies (discoms).
“I have no problem if a State Government wants to give subsidy, or even free power," Schindia said, adding that "free power must be given not on the balance sheet of the discom but on the balance sheet of the state government”.
While Scindia did not specifically name any state, the Governments have announced plans for or are already providing electricity free of cost or at lower rates to certain sections of the society, such as farmers.
“The states say they will give free power, but the losses suffered by the discoms are not bridged from the State government’s coffers and in the end it is the discom that suffers. This is the problem.”
The Minister’s comments come at a time when financial position of most of the discoms is in bad shape and the Centre’s Rs1.9 lakh crore debt restructuring package for these entities is facing roadblocks due to certain reservations expressed by some states.
The drug maker denies wrongdoing, but the Justice Department and a whistleblower say Novartis used cash and meals to get doctors to prescribe its drugs
On Jan. 23, 2008, the pharmaceutical company Novartis threw a party at a restaurant on Long Island. The party, which cost $1,250, was ostensibly for doctors to learn about cardiovascular drugs made by the company, with Novartis sales representatives present as well.
But no doctors ever came, according to a whistleblower lawsuit against Novartis that was unsealed last week. Instead, nine sales reps ran up the tab, and the company wrote an honorarium check to Dr. Robert Nissan, a Long Island family practitioner who wasn’t present, the lawsuit alleges.
The party, the lawsuit maintains, was one of “countless” events held by Novartis over a decade that were designed to direct kickbacks — cash, meals and favors to relatives — to doctors who prescribed the company’s drugs.
Last week, the Department of Justice joined the whistleblower lawsuit, which was originally filed in 2011 by Oswald Bilotta, a former Novartis sales representative on Long Island. “Novartis corrupted the prescription drug dispensing process with multi-million dollar ‘incentive programs’ that targeted doctors who, in exchange for illegal kickbacks, steered patients toward its drugs,” Preet Bharara, the U.S. attorney for the Southern District of New York, said in a statement.
Novartis has disputed the government’s allegations of wrongdoing; Nissan did not return several requests for comment.
Whether such payments by drug companies to physicians are kickbacks or a legitimate marketing and educational practice is a recurring controversy — as ProPublica has extensively reported. Our Dollars for Docs database  tracks $2 billion in payments to doctors from 15 drug companies, including Novartis. All but one have settled government lawsuits  alleging improper marketing practices.
A number of the doctors named in the Novartis case have received substantial sums since 2009, Dollars for Docs shows, including one physician who was paid more than $150,000 combined from six different drug companies.
Historically, the doctors cited in cases alleging improper marketing have not faced consequences. A ProPublica investigation in 2011 found that none of more than 75 doctors named in lawsuits since 2008 had been sanctioned, despite charges of fraud or conduct that put patients at risk.
Generally, payments like those in Dollars for Docs made for speaking, consulting, travel, meals and other promotional purposes are legal.
Novartis has only publicly reported payments since 2010, when the company pleaded guilty to a misdemeanor and paid $422.5 million to settle charges it had illegally promoted Trileptal, an anti-seizure drug, and had paid kickbacks for prescribing its drugs. Aside from the misdemeanor plea, Novartis denied wrongdoing.
The latest lawsuit is one of two filed last week by the Justice Department against Novartis in U.S. District Court in Manhattan. The company is also accused of paying kickbacks to pharmacies to promote Myfortic, a drug that suppresses the immune system. Novartis — which is bound by a corporate integrity agreement from its 2010 settlement — has disputed the allegations in both cases.
“We disagree with the way the government is characterizing our conduct in both of these matters and we stand behind our Compliance program,” Andre Wyss, the head of Novartis’s U.S. operations, said in a statement.
The whistleblower lawsuit alleges that Lotrel, a blood-pressure medication with sales of nearly $1.3 billion in 2006, “became a big seller for NOVARTIS because it paid physicians to write Lotrel prescriptions.” Novartis sales reps allegedly rewarded doctors with cash or gift checks and recruited them to attend “Clinical Learning Days” with honoraria of $250 to $500 a pop.
The meetings could be as short as half an hour, the whistleblower suit alleges, and doctors would be paid even if they didn’t show up. “So long as a physician was writing Lotrel prescriptions,” it says, “he or she could expect to be paid.”
Thousands of doctors took part in the alleged kickback scheme, according to the whistleblower lawsuit. But the case singles out 24 Long Island doctors and nurses, including Nissan. Nissan and two other physicians — Edward Condon, who specializes in internal medicine, and Mark Jagust, a family practitioner — “each received tens of thousands of dollars” from Novartis, according to the lawsuit.
Novartis also hired Ross Fishberger — the son of Kenneth Fishberger, another one of the doctors named — as a sales representative “in order to assure that Dr. Fishberger continued to prescribe” Lotrel and other Novartis drugs, according to the lawsuit. Novartis also allegedly employed Condon’s wife and daughter-in-law as sales reps.
Reached by ProPublica, Condon said he had no knowledge of the lawsuit, and hung up when asked more detailed questions. Jagust and the elder Fishberger did not respond to repeated requests for comment.
Ross Fishberger declined to comment when reached by ProPublica.
Condon received at least $156,094 in meals, travel, speaking fees and other expenses from six companies, including Novartis. Another doctor, Michael Shanik of Smithtown, N.Y., was paid at least $97,754 from six companies, including more than $30,000 from Novartis.
Robert Mormando, an internal medicine specialist in Port Jefferson Station, N.Y., who was also named in the case, told ProPublica he hadn’t taken any kickbacks and didn’t know of Long Island doctors who had.
“I would say it’s up for interpretation whether paying someone to be part of a speaking program” constitutes a kickback, he said. “I’m not aware of any doctors who have taken it to that level.”
Mormando said he had been a paid speaker for Novartis on three occasions a number of years ago and estimated he had earned between $1,200 and $1,500. According to Dollars for Docs, he was paid at least $9,958 from nine pharmaceutical companies since 2009, only $19 of which came from Novartis.
Another of the named doctors, Howard Hertz of Babylon, N.Y., also denied taking kickbacks in a brief interview. Hertz was paid at least $9,888 since 2010 from five drug companies, including $4,110 from Novartis, according to Dollars for Docs.
The main plank of the Justice Department’s lawsuit is the federal anti-kickback statute, which makes it illegal for drug companies to pay doctors with the intent of getting them to prescribe a particular drug or to reward them for doing so.
Kevin Outterson, a professor at Boston University Law School who has studied health care fraud, said it can difficult to prove intent in pursuing kickback cases.
“What it boils down to is they need smoking gun evidence,” he said.
But Outterson said he thought the Justice Department had a strong case. “It goes directly to the culture of wining and dining and having lavish entertainment and educational events in order to induce prescription writing,” he said.
Despite raising the issue of unwanted marketing calls to the HSBC’s highest authorities in India, Sinha continued to be harassed by telecallers on behalf of the lender. Finally, after over four years, a consumer forum found the Bank and its agents guilty and asked them to pay Rs50,000
During 2007-2008, Delhi-based Ashutosh Sinha suffered from innumerable telemarketing calls by direct selling agents (DSAs) of the Hong Kong and Shanghai Banking Corporation (HSBC). Incidentally, it was the same lender, who rejected Sinha’s application for a credit card and then wanted to sell him ‘other products’.
After repeatedly writing to all concerned officials from HSBC, Sinha even raised the issue before the Bank’s India chief, Naina Lal Kidwai (current president of FICCI). Unfortunately, despite her promises, Sinha continued to receive the unsolicited commercial communication or marketing calls from HSBC. Finally, in 2008, he approached a consumer forum, which last month upheld his appeal and fined HSBC and its three DSAs.
In its order, the Consumer Disputes Redressal Forum, said, “We are of the opinion that some unsolicited calls have been given to the Complainant by which the right of privacy of the Complainant was violated and the Complainant suffered inconvenience, harassment and mental agony due to unsolicited calls. We are of the opinion that Complainant is entitled to be reasonably compensated for that.”
The Forum asked HSBC and its three DSA to pay Rs50,000 as compensation for causing harassment to Sinha and also pay Rs5,000 towards litigation cost. However, he feels the penalty is paltry considering the inconvenience, harassment and mental agony he had to suffer. “Since the amount of Rs50,000 is too little, I may move higher court to make sure I drive the message home. I want this to be a lesson for all banks and financial institutions and hope others can learn from my experience too,” Sinha says.
Here is the first person account of Sinha’ ordeal to stop telemarketing calls from HSBC…
I moved to Delhi in March 2007 to join a new place of work after a three-year stint in Mumbai. A little later, sometime in May 2007, I applied for a credit card from HSBC. A person visited the office on behalf of HSBC, made me fill the form. He gave me a receipt for the application. About a month later, I was told that the application had been rejected. In addition, as happens with financial institutions, the communication was sugarcoated and no reason was given for the rejection.
No sooner had the application been rejected, I started getting calls for buying other products of HSBC such as personal loans, home loans and a whole lot of others. I ignored the first few calls because the rejection of the credit card application was fresh in my mind. And, besides, why should I give business to a bank that does not consider me worthy of a credit card customer?
However, the calls continued and refused to stop, so I decided to bring it to the notice of HSBC. I wrote to them repeatedly, and each time mentioned the number, date and time of the call. HSBC did reply to some of those emails and said that they were taking necessary action to have the calls stopped. But the calls did not stop. Between July and December 2007, I must have received at least 70 to 100 calls, some of which I did not respond. At times, I was so familiar with the numbers that I would not bother taking the call. On the occasions that I wrote to them, I made sure I wrote down the call details. Over several months, this became a trail of evidence that HSBC found it difficult to dismiss.
On 1 October 2007 the concept of Do Not Call was introduced by TRAI and it went live and I formally registered my phone to be a part of the do not call list. However, my phone was already on the do not disturb list by Vodafone.
On 23 December 2007, a little after 9am on Sunday, a person called me on behalf of HSBC, offering to sell credit cards. I asked the person to come home. Meanwhile, I called Malini Thadani (Head of Communications, Public Policy and Corporate Sustainability at HSBC at that time) and told her that if the person came home, I may beat him up. She was aghast and blurted, "How can you do that?" I told her the story of what had been happening for over six months. The person did not turn up.
Soon after, I got a text message from HSBC regional manager, Jamsher Dhillon. He came home the next day, with a bouquet of flowers, and assured me that I would not get calls from HSBC. I showed him the list of calls I had received, and within minutes, he found out about the culprits. He left my home at around 11:30am and before 3pm there was another call with a sales pitch! I called up Jamsher and he was surprised. He told me that he would send out an internal memo that no one should call my number. Much to my amazement, there were two more calls the next day. I contacted Jamsher again and he said that he was going to stop all telecalling. But he was surely lying because I got yet another call!
In the meantime, the quality control people from HSBC in Chennai apologized for what had been happening. They sent me an email and a hard copy of the letter, naming their channel partners who had been calling me regularly. Despite the apology, the calls did not stop!
I wrote to the HSBC headquarters and they asked me to contact the India office. Then, I wrote to Naina Lal Kidwai, who claimed that HSBC takes such matters very seriously! She referred the matter to the head of credit cards, Jagdish Khanna, who claimed that they were working on a system which would not allow any calls to be made if a phone number was on the do not call list. But till this was done, he said that he could not guarantee that the calls would stop.
The frequency of the calls, in the meanwhile, had come down but it did not cease completely.
Sometime in January 2013, when I had turned the heat on HSBC, the owner of Mascom India, one of the DSAs, contacted and met me at my office and claimed that he was a cousin of one of my colleagues and requested that I should not pursue the matter. A couple of weeks later, he came along with another person claiming to work for HSBC. The person wept inconsolably and said that because of my complaints, he was going to lose his job at HSBC. I decided to ignore his claims.
By now, I had decided that, whether it was HSBC or any other bank, it did not matter to them what end customers had to face. Therefore, I decided to pursue my case in the consumer court.
Nearly four and a half years after I had filed the case, on 22 April 2013, the consumer court found HSBC and its three DSAs guilty of violating my privacy and calling repeatedly. The guilty have been asked to pay Rs50,000 and Rs5,000 as litigation cost.
I still believe that I have got a raw deal since I have had to suffer at their hands for one full year. It must be pointed out that after the case was filed in the consumer court, I have never ever got any telemarketing calls from HSBC, but I still do get calls from HDFC Bank and Citibank.
You can read other stories of HSBC over here: http://moneylife.in/?cx=012932029967637413115%3Aroup7yt0ras&cof=FORID%3A9&ie=UTF-8&q=HSBC&imageField.x=15&imageField.y=11