Novartis, slammed by Korean scandal, tweaks its ethics, compliance policies

Novartis HQ cropped
A Novartis exec said the company is working to bolster its ethics and compliance policies after a corruption scandal in Korea. (Valentin Janiaut)

Rocked by a corruption scandal in Korea and facing a kickbacks probe in Greece, Novartis says it's strengthening and simplifying its global ethics and compliance approach.

The Swiss drug giant is aiming to shift from policing to coaching, with a compliance unit focused on helping local units make the right decisions, Novartis chief compliance and ethics officer Shannon Klinger told The Wall Street Journal. Novartis also wants to simplify its policies so they are easy to understand, she said.

Last month, Korean authorities handed out a $50 million fine and suspended coverage on several Novartis meds in relation to a bribery probe in the country. Novartis employees conducted a kickbacks scheme through medical journal-sponsored meetings, with the total spent on bribes estimated to be $2.3 million, according to officials.

Free Daily Newsletter

Like this story? Subscribe to FiercePharma!

Biopharma is a fast-growing world where big ideas come along daily. Our subscribers rely on FiercePharma as their must-read source for the latest news, analysis and data on drugs and the companies that make them. Sign up today to get pharma news and updates delivered to your inbox and read on the go.

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

Reflecting on the episode, Klinger told the WSJ that Novartis’ work in the country has been “overshadowed by the actions of a few associates.”

Separately, Novartis faces allegations of bribery in Greece. Speaking on a radio program in the country last month, Greek Justice Minister Stavros Kontonis said it seems that “thousands” of government officials and doctors in the country have been “directly bribed from Switzerland.”

A Novartis spokesperson responded that Greek authorities have only contacted the company through two visits from a prosecutor in December and January, and that the drugmaker hasn't received "any form of indictment or subpoena."

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

In Korea, Novartis’ controversy began in February 2016, when prosecutors raided a local office to gather documents and account books. After looking at the evidence, the country’s Ministry of Food and Drug Safety handed out some relatively minor punishments in February of this year. At the time, one source told The Investor that the Ministry of Health and Wellness was weighing “tougher” measures.

Sure enough, the MHW handed out a fine worth nearly $50 million in April. A Novartis spokesperson pointed out that the decision was made on a preliminary basis; a final decision is expected by the end of May.

Last year, Novartis agreed to a $25 million settlement with U.S. authorities to put to rest a bribery investigation in China.

Suggested Articles

Industry watchers have been speculating about just how high Novartis would price gene therapy Zolgensma. And now, they have an answer.

The WHO’s role in part is to provide prescribing guidance without an eye on profits. What happens when that guidance is tainted by private money?

After 19 sales reps left Amgen to help Karyopharm launch a rival multiple myeloma drug, Amgen sued. Now Karyopharm wants the suit thrown out.