Novartis Korea staff indicted for corruption

Novartis has stated that while it acknowledges this misconduct, it does not believe that Novartis Korea senior management were aware of it at the time. Keystone

Basel-based pharmaceutical company Novartis has confirmed news reports that six senior employees of their subsidiary in South Korea have been indicted by the Seoul Western District Prosecutor’s Office for corruption.

The employees are believed to have offered illegal rebates and kickbacks to doctors amounting to 2.6 billion won (CHF 2.3 million) between 2011 and 2016.

Altogether, 34 people – including 15 doctors and five heads of medical journals – have been included in the investigation, which began in February when authorities raided the Novartis Korea offices in Seoul on suspicion of bribing doctors to promote product sales.

The six staff members are also accused of paying for doctors to travel to international conferences, and of holding meetings with doctors that were, Novartis said in a Thursday statement quoted on Reuters, “inconsistent with our culture and the expectations society has for us”.

South Korean laws ban drug companies from providing doctors rebates or discounts for the drugs they prescribe. According to the prosecution, Novartis’ South Korean associates, including former Novartis Korea chief executive Moon Hak-sun, tried to go around the laws by funding academic events organized by publishers of medical journals, where the invited doctors allegedly received kickbacks disguised as attendance fees.

Under the nation’s law, drug companies that give rebates or discounts to physicians who prescribe their products can have the sale of those products banned for up to six months; however it has not been confirmed that this will be the case for Novartis.

The Swiss company has also launched an internal investigation aimed at identifying and disciplining any wrongdoers. “Novartis does not tolerate misconduct and we are already implementing a remediation plan in Korea based on the findings from our own investigation,” the company said.