Sources: Novartis faces yet another sanction in Japan

Japanese Prime Minister Shinzo Abe

In case Novartis ($NVS) didn't get the message the first two times around about how displeased Japanese authorities are concerning its missteps in the country, they are expected to once again censure the Swiss drugmaker.

Sources are telling the Japan Times that the Ministry of Health, Labor and Welfare will serve the drugmaker's Japan operation with a business improvement order, maybe yet this month, for its failure to report adverse events. The publication said Novartis declined to comment.

If issued, it would again remind the public about the drugmaker's failings in the country the last two years. The Japanese government in February slapped the drugmaker with a 15-day suspension of all operations as punishment for failing to properly report 3,000 cases of adverse effects from about two dozen company drugs. Drugmakers are required to report serious side effects to the ministry within 15 to 30 days. Novartis said an in-house technical issue allowed the reports to languish.

That action followed the receipt of a business improvement order last year for failing to properly report side effects of two leukemia drugs. And those actions followed a data integrity drama that unfolded in 2013 when a researcher with ties to the company was accused of manipulating the data in clinical studies on Novartis' blockbuster heart drug Diovan. The company had to face false advertising charges and the researcher was indicted.

Novartis pharma chief David Epstein

Japan is an important market for Novartis and the scandals have put Novartis pharma chief David Epstein in the position of having to repeatedly apologize for the failures. Besides saying the company was sorry, he replaced the managers in the unit and put the rest of its employees through remedial training.

CEO Joe Jimenez has acknowledged the company's reputation has been tainted by the events but insists it can regain its former stature by continuing to bring innovative drugs to the country. In an interview shortly after the suspension, Jimenez told Nikkei in that way, "we can return to that same high level of reputation with the Novartis name."

- read the Japan Times story