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Novartis embroiled in another illegal kickback allegation

Lee Han-soo  Published 2018.04.20  14:18  Updated 2018.04.20 14:18

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Novartis, the Switzerland-based multinational pharmaceutical company, is facing new bribery allegations in China.

The allegations came after a whistleblower, who claims to had worked at the company until recently, posted a letter on a Chinese website accusing the company of holding “fake” conferences to raise kickback funds for doctors.

According to the letter, the company used the funds to provide illegal rebates to doctors to increase prescription for drugs such as its high blood pressure drug Diovan and Exforge.

The letter revealed that doctors would receive money for every box they sold or when subscribing new patients to the company’s medications.

Novartis responded to the allegations with a public statement on April 4.

“Novartis always adheres to the principles of national laws and regulations, promotes high standards of business ethics, and attaches great importance to the value of employees,” the company said in a statement. “Company’s related departments are investigating this matter.”

Novartis promises to strictly promote internal self-examination on the premise of protecting the legitimate rights and interests of all employees involved, it added.

The company also added that the released statement would be the only official announcement made regarding the incident.

The case is the second time the company has faced rebate allegations in China. Although the company did not admit to any wrongdoing, the company paid $25 million to settle the charges brought against them by the U.S. Securities and Exchange Commission (SEC). During that time, the SEC found the company’s Chinese subsidiaries had recorded payments for travel, conferences and lecture fees in line with boosting its sales.

As of now, no authorities have opened an investigation into the allegations. However, in recent years, illegal kickback seems to have become a recurring problem for the company on a global scale.

In 2017, the Ministry of Health and Welfare decided to impose a fine of 55.1 billion won ($48.6 million) on Novartis Korea and suspend insurance benefits for nine of its products for six months for dishing out illegal rebates.

The move followed a district prosecutor office’s indictment of Novartis in 2016, which accused the company of providing 2.59 billion won in illegal rebates to doctors over the previous five years. The case is still in court awaiting a ruling.

More recently, the company was involved in a bribery probe in Greece. The probe is against allegations that Novartis bribed top government officials in exchange for fixing drug prices.

“Such actions led to a surge in health spending by the Greek authorities, which is implementing drastic cuts,” a local paper quoted Greece Justice Minister Stavros Kontonis as saying.

corea022@docdocdoc.co.kr

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