Worried about Novartis' rep, pharma chief cuts Japanese execs' pay till data probe resolved

Novartis ($NVS) pharma chief David Epstein isn't worried about Japanese sales of the blood pressure drug Diovan. He's "much more worried" about the Swiss drugmaker's reputation, now that its Diovan marketing and research are under investigation in Japan. And top-level Novartis managers in Japan are already feeling the effects of that concern.

Epstein acknowledged that Diovan sales haven't been unscathed in the country, which typically accounts for about one-quarter of the drug's revenues, Reuters reports. "It is true that sales have declined somewhat," Epstein said at a press conference in Tokyo today (as quoted by the news service). But, he added, "Diovan is a relatively small part of our portfolio ... so the impact should not be significant."

What could be more significant, Epstein said, is the Japanese probe's effect on Novartis' worldwide image. The company's two top Japanese officials are taking a 30% pay cut till the issue is resolved, Epstein said, and the unit's former chief left the company as of Monday. "Clearly if something happens in one market, it impacts our reputation and that's something that we feel acutely all around the world," he said, as quoted by The Wall Street Journal.

The Diovan questions arose in August after two Japanese universities found that data on the drug had been changed to tweak research results. As the WSJ notes, it's unclear who manipulated the data. Officials are investigating the involvement of a Novartis employee, who has since left the company, in the research.

Novartis has said its own probe into the employee's work found no evidence of data-tampering. But the company acknowledged a conflict of interest because the employee wasn't identified as such in published articles.

"I would once again like to apologize for Novartis' involvement in this issue," Epstein said at the press conference. "Controls have been put in place to ensure this cannot happen again."

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