Is Novartis (NVS) being investigated for paying bribes in Turkey? This seems to depend upon who you ask.
Last week, the drug maker told us that it had concluded an internal investigation and found the accusations were unsubstantiated. The allegations surfaced in March in a report that an anonymous whistleblower accused the drug maker of using a consulting firm to pay bribes so its medicines could be added to formularies, the list of drugs approved for use in government-run hospitals.
Novartis also said last week that, while it was cooperating with Turkish authorities, the investigation “really isn’t a confirmed issue.” And the drug maker told Reuters that “we are not aware of any government authority investigating Novartis. We now consider this matter closed.”
On Wednesday, though, an official at Turkey’s health ministry in Ankara told Reuters that an investigation into Novartis was still “ongoing,” but declined to give further details. So we asked Novartis for clarification and a spokesman wrote us that the statement given last week “still holds from our perspective. But of course, we will check the status in Turkey based on the latest round of coverage.”
Bribery allegations are, no doubt, a sensitive issue. To what extent Novartis management in Turkey is clearly communicating the facts on the ground to corporate headquarters remains to be seen. But in any event, Novartis would welcome any opportunity to put such charges behind it, especially given a recent spate of embarrassing incidents.
In a development that generated significant notice, six former and current Novartis executives at its Korean unit were indicted last week on charges of paying more than $2 million to doctors in return for prescribing its medicines. Among those indicted was the former chief executive in the country.
As we reported, from 2011 through earlier this year, the drug maker funded academic events that were supposedly organized by medical journals, but distributed to doctors money disguised as attendance fees and for articles that the doctors contributed to the publications. The company acknowledged the transgressions, but denied the “alleged conduct” was sanctioned by senior managements in Korea.
And in March, Novartis agreed to pay $25 million to settle charges that it violated the Foreign Corrupt Practices Act by making illegal payments to health care providers in China. Novartis employees at two different Chinese subsidiaries gave money, gifts, vacations, and entertainment, among other things, to health care professionals between 2009 and 2011, according to US authorities.
We should note that Novartis is, by no means, the only global drug maker that has been probed or fined by various governments for paying bribes to boost prescriptions. Over the past few years, several drug makers were enmeshed in bribery scandals. The most notorious example involved GlaxoSmithKline (GSK), which, three years ago, was found guilty by a Chinese court of bribing doctors, hospitals, and other nongovernment personnel, and was fined more than $490 million.
And earlier this year, Bristol-Myers Squibb ended payments given to doctors in China shortly after agreeing to pay more than $14 million to resolve charges that it violated the Foreign Corrupt Practices Act by making illegal payments to health care providers in the country.