Novartis Managers Guilty of Bribery in South Korea
South Korean prosecutors have indicted Novartis employees for bribing doctors in exchange for prescribing the company’s drugs. The Swiss drugmaker confirmed press reports that six current or former employees had been indicted by the Seoul Western District Prosecutors’ Office. “Novartis does not tolerate misconduct and we are already implementing a remediation plan in Korea based on the findings from our own investigation, the company said in an official statement.
However, it rejected the implication that the alleged conduct was sanctioned by the “most senior management” at Novartis Korea. The Basle-based company also declined to comment on a report in the British newspaper Financial Times that the indictment might trigger a sales ban in the country.
Reports said the prosecution found that Novartis’ South Korean associates, including former CEO Moon Hak-sun, tried to circumvent the law by funding academic events organized by medical journal publishers, where the invited doctors allegedly received kickbacks disguised as attendance fees.
The Prosecutors Office indicted 28 other people, including 15 doctors and six publishers of medical journals over their suspected involvement in transactions that occurred between 2011 and January 2016.
Novartis has been the subject of several probes where it has been accused of bribing doctors to boost sales of pharmaceuticals.
In March, it agreed to pay more than $25 million to the US government to settle charges that it bribed healthcare officials in China. Last November, it was fined $390 million by the US Justice Department for granting kickbacks to pharmacies that recommended the company’s drugs.
Novartis is also still fighting a second US lawsuit where it is alleged that it paid lavish speaking fees and provided opulent meals to induce doctors to prescribe its drugs.
CEO Joe Jimenez said in April that legal scrutiny over kickbacks largely related to “legacy issues” stemming from Novartis’ historic “results-oriented” culture. Jimenez said he has since implemented measures to halt inappropriate behavior.
