Novartis' US unit settles gender discrimination claims in $152.5 million deal

Swiss drug major Novartis says that its US subsidiary, Novartis Pharmaceuticals Corp (NPC), has reached an 'amicable' end to litigation in a class action suit over gender discrimination brought by female employees, agreeing to a settlement of around $152.5 million and to spend an estimated $22.5 million on improving policies and programs to promote equality in the workplace.

"While we believe that there was not systemic discrimination at NPC, the trial revealed that some of our associates had experiences influenced by managerial behavior inconsistent with our values," said Joe Jimenez, chief executive of Novartis AG. "As a company we are now even more strongly resolved to ensure that all our employees act and behave in accordance with our corporate values. We aspire to be a leader in diversity and inclusion, and I am committed to implementing decisive measures to ensure that we act in accordance with our values," he added.

Earlier this year, a New York jury delivered a unanimous verdict against Novartis on all counts and awarding 12 former Novartis sales reps $3.36 million in compensatory damages (The Pharma Letter May 20). Announcing the amount of punitive damages to be awarded, the jury determined that Novartis must pay an additional $250 million for the gender discrimination it inflicted on 5,600 working women in the class. The women alleged that they were discriminated against in the areas of pay, promotions and pregnancy-related matters, and were seeking up to $200 million in damages, including back pay, lost benefits and adjusted wages. The case was the largest gender discrimination matter ever to go to verdict in the USA.