Last month, Japanese authorities arrested an ex-Novartis ($NVS) employee who allegedly manipulated trial data later used to promote the blockbuster blood pressure med Diovan. But now, it looks as if he may not be the only one paying the price.
The Swiss pharma itself is facing criminal charges in the country over claims that it failed to adequately oversee the former worker, Nobuo Shirahashi, who allegedly provided clinical trial researchers with false data. The results of those suspect studies were used to promote Diovan, officials say.
Novartis said in a statement that it expects Tokyo's District Prosecutor Office to proceed with charges against its Japanese subsidiary, Novartis Pharma KK. The charges would carry a maximum penalty of ¥2 million ($19,700).
Red flags first popped up last year, when it came to light that an employee had been involved in some post-marketing cardio studies on Diovan, without disclosing his affiliation with the company. Since then, several Japanese universities involved in Diovan studies retracted their research, and Japan's government filed a separate criminal complaint against Novartis related to allegedly exaggerated Diovan advertising.
Novartis hasn't stood idly by; it cut pay last October for Japanese execs, and in April, it introduced a host of corrective measures, including a third-party review, remedial training and the replacement of the Japan unit's senior management.
"We are committed to changing the culture at NPKK and demonstrating ethical leadership among pharmaceutical companies in Japan," Novartis Pharma chief David Epstein said in a statement.
But cleaning up bad behavior overseas can be easier said than done. Just ask GlaxoSmithKline ($GSK), which has faced corruption claims in several countries even after it swapped out personnel, revamped its marketing practices and publicly apologized for a $489 million bribery scheme allegedly orchestrated by its China unit.
And Novartis already has another Japanese probe on its hands; according to Japan's Labor and Welfare Ministry, its sales reps may have worked directly with researchers in a study of side effects for leukemia drugs Gleevec and Tasigna.
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