Greek corruption investigators were looking into charges that Novartis bribed a group of politicians for preferential pricing of its drugs. Now that investigation is falling apart.
On Monday, prosecutors returned a case file to Greek Parliament clearing four politicians in a whistleblower investigation alleging a long-running bribery scheme between the Swiss drugmaker and 10 politicians from the country’s New Democracy party, Kathimerini reported.
The only name still listed on the file was that of former health minister Andreas Loverdos, but the newspaper reported investigators had found no evidence of Loverdos accepting bribes. The prosecutors' case relies solely on witness testimony, the publication reported.
At least four of the remaining five politicians are expected to be cleared of all charges, the newspaper said, in what New Democracy officials have called a scam led by the country’s governing party, SYRIZA.
The case’s collapse comes after a Novartis internal probe in March found no evidence of “inappropriate payments” between company officials and Greek lawmakers. Those findings reflected a report from an expert panel in Greece, which also said last month that they had found no sign of suspicious payments to key officials, Kathimerini reported.
The bribery allegations, based on three whistleblower accounts, accused Novartis of paying former government officials—including two former prime ministers—millions of euros in exchange for increased sales of its products between 2006 to 2015.
Novartis’ internal probe did not address additional allegations in the suit that the company paid doctors in a kickback scheme to boost prescriptions.
As Novartis’ Greek tragedy unravels, the company is still in hot water with U.S. prosecutors as its earnest CEO Vas Narasimhan has worked to remake the company in his own image.
Last week, a U.S. District judge threw out Novartis’ request for summary judgment in a kickback lawsuit alleging a “companywide” scheme to pay doctors for scripts through sham promotional events.
Among the over-the-top allegations in that suit, prosecutors said Novartis sales officials treated doctors to $10,000 dinners at chic NYC seafood restaurant Nobu, held a promotional event aboard a fishing boat and treated physicians to wild nights at Hooters. That case is expected to go to a jury trial unless a settlement is reached.
Novartis was also flagged by Congress last year after it shelled out $1.2 million to Michael Cohen, the former personal lawyer and “fixer” for President Donald Trump. Novartis said it made the payments after Cohen approached the drugmaker offering insight into the Trump administration after his inauguration in January 2017. Company officials later said they received nothing from the arrangement.
As those dramas play out, Narasimhan, in his second year as CEO, has targeted M&A spending of $10 billion a year to help build out its pipeline in gene and cell therapy and pursue other "transformative" innovation. In 2018, Narasimhan spearheaded the acquisitions of gene therapy company AveXis and radiotherapy company Endocyte for $8.7 billion and $2.7 billion, respectively.
Meanwhile, the company has been shedding assets beyond its prescription drug business. Tuesday, the company wrapped up a spinoff of its eye division Alcon, acquired in a 2010 deal engineered by former CEO Daniel Vasella. The company has also sold some of its Sandoz generics business, and it's working to segregate that division from the rest of the company in a move some consider a prelude to a sale.