'Zorro' claims Novartis' Alcon unit faked trials to bribe Chinese docs

Novartis: Internal trials audit found no rule-breaking
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The bribery allegations in China just keep on coming. Novartis' Alcon eyecare division now says it will investigate claims it used fabricated clinical trials to bribe doctors. The news is none too welcome for Novartis ($NVS), which has already faced a set of bribery accusations in China.

China's 21st Century Business Herald publicized whistleblower allegations against Alcon on Tuesday, the Financial Times reports. Citing an Alcon employee codenamed Zorro, the Chinese newspaper reports that Alcon used a middleman to pay doctors for working on non-existent post-marketing clinical trials. The claims say Alcon outsourced the trials to a third-party research company, which in turn compensated doctors with "research payments."

According to Zorro, Alcon used funds earmarked for "patient experience surveys" on lens implants to bribe doctors at more than 200 hospitals. One doctor received 45,000 yuan, or about $7,300, for studying 150 patients, the whistleblower said. Alcon allegedly spent more than 1.4 million yuan, or nearly $230,000, on such studies last year.

For its part, Alcon said it conducted an internal review in 2012, finding it "acted in accordance with the appropriate rules" and regulations. The trials "are conducted by a reputable and experienced independent third party with expertise in survey design, electronic data capture, statistical analysis and program management," Alcon said in an emailed statement. 

Alcon is joining a growing list of companies and units under fire in China as the country looks to crack down on industry corruption and rein in healthcare costs. Since the first corruption allegations against GlaxoSmithKline ($GSK) broke in July, the 21st Century Business Herald has published several stories accusing foreign and local drugmakers of bribery. Among them is another set of whistleblower accusations against Novartis. Last month, a former employee claimed her manager encouraged her to offer kickbacks to doctors to boost use of the cancer drug Sandostatin LAR.

The latest whistleblower account doesn't bode well for drugmakers in China, as mounting scandal around the industry has done nothing good for sales. Late last month, Ipsen ($IPN) CEO Marc de Garidel said Chinese probes of Glaxo and others had put a chill on sales. Those companies under investigation are not even attempting to promote their products, he said, and other drugmakers can't because worried doctors are refusing to meet with sales reps. Reports say business is so bad that GlaxoSmithKline, at the center of the investigation, is evaluating whether to pull out of the Chinese market altogether.

- see the statement from Alcon 
- read more from the FT (sub. req.)

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