Novartis' blood pressure drug Diovan is on the wane as the company expects generics next quarter to begin eating at its blockbuster status. But even as it comes under attack by generics, so does its reputation, as a probe by Novartis ($NVS) reveals that not everything in its trials in Japan followed accepted protocol.
This month, Novartis opened an investigation after learning that a company employee was affiliated with a study of Diovan as a statistician without revealing his ties to the Swiss healthcare giant. The investigation is ongoing, but in a new statement on its website, the drugmaker says its "current understanding is that one of our former employees had varying levels of involvement" in 5 trials in Japan and that one of his underlings was involved in one. The company then goes on to lay out the specifics of the involvement it has already unearthed. It says it has found no evidence that the researcher, who believed he was allowed to participate, did anything to manipulate data to favor the drug. It says it welcomes outside experts doing work to validate the findings.
As Forbes' contributor Larry Husten points out, it is just the latest in a widening controversy over studies of the big-market drug, including the Kyoto Heart Study, which has since been retracted. The statement, posted Wednesday, does apologize for Novartis' earlier defense of the Kyoto Heart Study, saying its position was based on what it believed at the time.
What the mess will mean for Novartis is uncertain, although Pharmalot points out the Kyoto study helped boost sales of the drug in Japan. Novartis has said it was not used for registering the drug. Up until now, the drugmaker has been pretty lucky when it came to Diovan. The drug lost patent protection in October, but the generic expected from Ranbaxy Laboratories never materialized, probably because of Ranbaxy's legal problems with U.S. regulators. Still, sales of the drug did drop--to $918 million last quarter from $1.19 billion--but not nearly as much as they would have otherwise. Novartis expects that to change beginning next quarter, however, as Ranbaxy's 6-month exclusivity expires and the generic floodgates open. Novartis has already said it is eliminating 2,000 jobs in the U.S., in part because of that patent loss.