Sun Pharma is no stranger to controversy. But after fighting insider trading allegations, Sun is facing a new challenge: In two lawsuits, former salespeople claim executives fired them for refusing to market drugs off-label.
Attorneys for Sandra Hagenbrock, a former national account director for Sun, claimed her superiors directed her to tout unapproved uses of prostate cancer med Yonsa, a practice Hagenbrock said violated the False Claims Act. After refusing to follow orders, Hagenbrock said, she was fired.
The lawsuit is the second in four months filed against Sun on similar claims. In July, former employee Damian Fritz said management pushed him to market off-label uses for Yonsa as well as psoriasis med Ilumya and acne treatment Absorica.
Both suits specifically targeted Sun's associate vice president of sales, Janet Sharp, who allegedly directed both Hagenbrock and Fritz to "talk off-label" about the company's drugs. To back up the scheme, Fritz claimed, Sun's executives "instructed its sales members not to put such solicitations in writing, but to make the pitch in person, over the phone, or in any untraceable manner."
A Sun spokesman said the allegations in the two lawsuits were "without merit" and pledged to "vigorously defend" itself.
The newest claims against Sun come nearly a year after a pair of whistleblower complaints of insider trading sent the drugmaker's stock tumbling to a six-year low.
In January, a whistleblower alleged in a 172-page complaint that dubious transactions amounting to more than Rs 5,800 crore ($816 million) took place between Sun distributor Aditya Medisales and Suraksha Realty, a firm controlled by Sun director Sudhir Valia, financial news site Moneylife said. Valia is also Sun helmsman Dilip Shanghvi’s brother-in-law.
The January complaint was the second stemming from the same whistleblower, whose initial allegations were confirmed by India’s Securities and Exchange Board of India (SEBI) in December. The first complaint accused Sun of insider trading in its acquisition of Ranbaxy.
In 2017, Sun, Shanghvi, Valia, former Ranbaxy CEO Arun Sawhney and several other Daiichi and Sun execs paid SEBI Rs 18 lakh ($25,500) to settle charges of insider trading without admitting wrongdoing.