Novartis execs indicted in bribery scandal—this time in Korea
- Six Novartis executives in Korea were charged with paying $2 million dollars in bribes to physicians in exchange for prescribing Novartis drugs during the period between January 2011 and early 2016.
- According to the Korean Herald, the former CEO of Novartis Korea, Moon Hak-sun, was amongst those indicted.
- The case extended beyond top execs to include six medical journal publishers and 15 doctors at general hospitals. The investigation was initiated when the Seoul Western District Prosecutors' Office raided Novartis' Korean headquarters.
This is the latest in a string of kickback-related scandals that Novartis has been involved in within the last several years. Earlier this year, Novartis faced unsubstantiated bribery allegations in Turkey, not long after paying a $25 million settlement with the U.S. government for a bribery scandal in China. In 2015, the Swiss company paid $390 million to settle a separate case in the U.S. related to kickbacks to specialty pharmacies.
The latest case involves six top-brass execs at Novartis Korea, including the former CEO. The vehicle for kickbacks involved a series of sham events organized by the medical publications, in which physicians were 'reimbursed' for attending events and writing articles afterwards.
In response to the charges, Novartis reiterated its lack of tolerance for this type of misconduct. Novartis has a corporate compliance program that includes a rigorous training program for employees.
According to the company's website: "Our live and computer-based programs include, but are not limited to, meaningful discussion of the application and consequences of the False Claims Act, Anti-Kickback Statute, OIG Compliance Program Guidance, PhRMA Code on Interactions with Healthcare Professionals, as well as other applicable federal, state, and industry rules and guidelines."
Despite a rigorous compliance program, Novartis faces the challenge that many multinational pharma companies face. With almost 119,000 employees located at offices throughout the world, Novartis must enforce a compliance code in the context of different cultures with different cultural mores. Clearly, that's a huge task.
Novartis isn't the only company that has faced these charges. Other prominent companies have recently faced kickback scandals, conducted via various vehicles, including GlaxoSmithKline, Bristol-Myers Squibb and SciClone Pharmaceuticals.