Novartis to pay $50M, lose some drug coverage in Korean bribery probe

Korean officials fined Novartis approximately $50 million as part of a kickbacks probe in the country. (Courtesy of Valentin Janiaut)

For more than a year, Novartis has been under investigation in Korea for allegedly bribing doctors to pump up sales. Now, the Swiss drug giant is learning about its punishment in the country as authorities there decided to issue a fine of nearly $50 million.

On a preliminary basis, Korea’s Ministry of Health & Welfare (MHW) has fined Novartis 55 billion Korean won, approximately $50 million, and suspended reimbursement of Exelon and Zometa for three months. The final decision is expected by the end of May.

Previously, authorities were weighing a suspension of the company’s big-selling cancer med Glivec, according to The Korea Times, but feared that move would leave some 3,000 to 5,000 chronic myeloid leukemia patients with no other options.

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“As previously stated, we regret that certain associates in Korea conducted small medical meetings and other scientific related activities through trade journals, in violation of our policies and inconsistent with our culture and the expectations society has for us and our industry,” a Novartis spokesperson said via email.

The company’s “commitment to bringing life-changing medicines to patients in Korea remains unchanged,” he continued. Korean authorities won’t force lower prices on Novartis meds as part of the punishment.

RELATED: Novartis products suspended in South Korea as officials weigh 'tougher' measures

The move follows separate punitive action by Korea’s Ministry of Food and Drug Safety, which issued a small fine and a 3-month suspension on three meds earlier this year. At the time, an MHW spokesperson said government officials were weighing “tougher” measures.

"We will continue to try hard to root out such practices in the pharmaceutical industry with strong measures," officials said in a new MHW statement, according to The Korea Times.

Last year, prosecutors in the country raided Novartis offices to gather documents and account books. South Korean officials later indicted a half-dozen Novartis execs, as well as more than a dozen doctors and five medical journal heads.

The authorities contend that the company’s employees provided approximately $2.3 million in unlawful kickbacks. The Korea Times says the criminal trial is now underway.

RELATED: Greek official: 'Thousands' of people implicated in Novartis bribery probe

Outside of Korea, Novartis faces separate bribery claims in Greece, where an official earlier this month said “thousands” of people could be implicated. In response, a Novartis spokesperson pointed out that Greek authorities only contacted the company through two visits, and that Novartis hasn’t received "any form of indictment or subpoena."

The company faced other allegations in Turkey, which it now considers “unsubstantiated,” and paid $25 million to U.S. authorities last year to settle a bribery investigation in China.