Case closed: Novartis, government found no merit in allegations in Turkey

Novartis HQ

Novartis ($NVS) has acknowledged that employees in South Korea may have been involved in some rebate shenanigans. But it says an investigation of similar accusations in Turkey uncovered no problems. Now, Novartis considers the matter closed.

In April, a prosecutor in Turkey was reported to have opened an investigation after receiving a copy of an email sent by an anonymous whistleblower to Novartis CEO Joe Jimenez and a board member saying the unit there paid consultants $290,000 in 2013 and 2014 to win about $85 million in business from government hospitals.

But in an email to Reuters today, the Swiss drugmaker said that it was unaware of any government authority in Turkey investigating the company and that the allegations had long ago been vetted and discredited.

"Based on thorough internal and external counsel investigations we have concluded that all recent publicly and anonymously reported allegations relating to Novartis Turkey are unsubstantiated. We now consider this matter closed," it told the news service.

When reports surfaced in the spring that a prosecutor in Turkey had launched an investigation into the email, the drugmaker explained it had looked into the allegations way back in 2013 and 2014, collected up the info and shared it with authorities in Turkey, as well as the U.S. Securities and Exchange Commission. It said that upon review, the Republic of Turkey Ministry of Labor and Social Security was satisfied and took no action.

The matter is not so cut and dry in South Korea. In that case, prosecutors want the government to suspend the company’s operations there after they indicted a half-dozen executives for issuing improper rebates.

Novartis quickly acknowledged that "some associates supported travel to overseas congresses for some healthcare practitioners" acting in a way that didn't comply with South Korea’s self-regulation standards and violated the company’s own policies. It said it was putting a remediation plan in place there.

But it was adamant in an emailed response that the bad players acted on their own: “We reject the implication that the alleged conduct was sanctioned by the most senior management of Novartis Korea. We will take time to review the details of the indictment thoroughly and consider our next steps.”

Novartis has had to face an interruption of business in an entire county before. Last spring, Japan suspended Novartis' operations in the country for 15 days for failing to properly report drug side effects. Novartis was the first drugmaker to receive that kind of punishment for a lapse in side effects reporting.

- here’s the Reuters story  

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