Italian officials probe Novartis for possible flu vaccine pricing fraud

Novartis ($NVS) is in the process of trying to hive off its flu vaccines business after selling off the rest of its vax unit to GlaxoSmithKline ($GSK). But first, it may have to deal with an Italian fraud investigation over pricing on a pair of those products.

Italian police searched Novartis sites in Siena and Origgio as part of a probe into possible fraud linked to the purchase of two flu vaccines--one for a pandemic in 2009--by the country's Health Ministry, Bloomberg reported Friday. According to police allegations, Novartis inflated the cost of an additive to the vaccines, MF59, by 600%, costing the country potentially upward of €16 million ($22 million) in the process.

The Swiss pharma is cooperating fully with the investigation, it told FierceVaccines in a statement: "Novartis is committed to high standards of ethical business conduct and regulatory compliance in all aspects of its work."

The company will have to hope the situation in Italy won't impact the sales process for its flu business, which it said it would unload after shipping most of its struggling vaccines unit to rival Glaxo in a multibillion-dollar asset swap expected to close in mid-2015.

Italy is a hub for Novartis' vaccines business; the country is one of 5 that are home to the company's main vaccines marketing and sales organizations, and two of its principal production facilities are based there as well. Italian sales helped bring the company's European third-party vaccines haul to $654 million in 2013, making up 33% of Novartis' global total top-line tally.

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