Novartis: Turkish ministry couldn't substantiate bribery claim

Novartis ($NVS) says that whistleblower allegations that it used bribes in Turkey to win business is old news that has already been deemed unsubstantiated by labor authorities in that country. Maybe so, but the chief prosecutor's office in Ankara is taking its own look into the allegations.

Novartis CEO Joe Jimenez

A report from Reuters this week said an anonymous whistleblower had sent a lengthy email to Novartis CEO Joe Jimenez and a board member saying the unit paid Alp Aydin Consultancy $290,000 plus costs during 2013 and 2014 to win about $85 million in business from government-run hospitals.

Novartis has acknowledged that it previously did business with Alp but no longer does. But Novartis says an internal investigation determined the allegations were false, Swissinfo reported today. The drugmaker said in a statement that it shared its findings with both the Securities Exchange Commission in the U.S. and with authorities in Turkey.

"In 2013, we initiated an internal investigation which concluded in 2014 that the allegations were unsubstantiated," the company told the news service in a statement. "In 2014, the Republic of Turkey Ministry of Labor and Social Security conducted its own enquiry into the allegations. Novartis co-operated fully with the Turkish authorities in that investigation, which concluded that all allegations were unsubstantiated and no action was taken by the Ministry."

Citing Turkish TV reports, Reuters said today that the chief prosecutor in Turkey had launched an investigation.

The drugmaker has been dogged by similar allegations in a number of countries. Last week, Novartis agreed to pay more than $25 million to settle a case with the U.S. Securities & Exchange Commission over allegations of bribery in China. In February, South Korean law enforcement reportedly seized documents and account books from Novartis' offices there. The Korea Herald reported at the time they will looking into allegations the company paid "rebates" to local doctors that might be considered kickbacks.

But Novartis is far from the only pharma company that has been accused of using kickbacks to win business in some countries. Pfizer ($PFE), Johnson & Johnson ($JNJ), Teva Pharmaceutical Industries ($TEVA) and AstraZeneca ($AZN) have all settled cases in the U.S. brought under the Foreign Corrupt Practices Act. And in a highly publicized case in China, GlaxoSmithKline ($GSK) in 2013 paid out $489 million to settle bribery charges there.

- read the Swissinfo story
- more from Reuters

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