Novartis AG Investigates $85 Million Bribery Allegations Made By an Anonymous Whistleblower in Turkey

Published: Mar 31, 2016

Novartis Investigates $85 Million Bribery Allegations Made By an Anonymous Whistleblower in Turkey
March 31, 2016
By Alex Keown, BioSpace.com Breaking News Staff

NEW YORK -- Swiss-based Novartis is facing more legal questions. An anonymous whistleblower in Turkey has accused the company of paying bribes to secure $85 million in business advantages in that company, Reuters reported this morning.

Citing an email sent to Novartis’ Joe Jimenez, the company’s chief executive officer, Reuters said the whistleblower claims Novartis paid a Turkish consulting firm $290,000 over a two-year period to get Novartis medicines added to approved lists for government-run hospitals, as well as “avoiding price cuts in other countries by securing government approval to change the names of two drugs.” In the email the whistleblower said Novartis earned the equivalent of $20 million from the consulting agency’s efforts in getting rugs used for multiple sclerosis, chronic lung disease and juvenile arthritis added to the government-run hospital’s approved medicines list. The whistleblower said Novartis gained about $50 million by the renaming of its drugs Ilaris and Gilenya to Ibecta and Fingya. Reuters said the renaming of the drugs means the company “dropped out of international pricing comparisons, since such cross-referencing is based on commercial names.”

Novartis confirmed with Reuters that it was investigating the allegations and said the consulting firm, Alp Aydin Consultancy, was no longer a firm the drugmaker used. The company said it was looking into allegations that members of the consulting firm had passed Novartis funds to Turkish healthcare officials and that Novartis Turkey had hired the relatives of doctors who prescribed a large amount of Novartis drugs.

This is not the first time the drugmaker has come under scrutiny for bribes and kickbacks. Earlier this month Novartis also agreed to pay $25 million to settle charges it violated China’s Foreign Corrupt Practices Act, Statnews reported Sunday. The company was fined for allegedly bribing health care providers in that country to distribute its drugs. According to the U.S. Securities and Exchange Commission, Novartis subsidiaries in China engaged in various schemes from 2009 to 2013. One such allegations involved Novartis’ Sandoz subsidiary to bring Chinese health care workers to the United States for a 2009 health care conference in Chicago. Instead of attending the conference, the company arranged visits to various points of interest to places like Niagara Falls and also provided hundreds of dollars in cash to each Chinese officials as “walking around money,” the SEC said.

Last month South Korean officials raided Novartis offices in that country over allegations of bribery and kickback schemes. Stat News reported the Seoul Western District Prosecutors’ Office confiscated several documents and account books to determine if rebates given to doctors were actually bribes.

Novartis is also facing allegations in the United States that the company hosted about 80,000 “sham” events in which the government maintains the drug company “wined and dined” doctors to prescribe the company’s cardiovascular drugs.

In November 2015 Novartis agreed to pay $390 million to settle a civil lawsuit related to the kickback payments to specialty pharmacy companies that distributed the drugs Exjade and Myfortic. Although Novartis paid the amount, they neither admitted nor denied liability. The settlement, which is between Novartis Pharmaceutical Corporation , a U.S. subsidiary of Novartis AG, will be paid to both the U.S. government and to state Medicaid programs. The governments of more than 40 U.S. states raised concerns over payments Novartis made to the specialty pharmacy companies it contracts with to entice them to recommend prescriptions to Medicaid and Medicare patients.

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