Novartis under criminal investigation by South Korea for allegations of kickbacks to doctors

Swiss pharmaceutical manufacturer Novartis AG is under criminal investigation by South Korea for allegations of offering kickbacks to doctors who used its products. The kickbacks may have been in the form of rebates to those physicians prescribing the company products.

The investigation comes a month after Novartis agreed to pay $25 million to the US Securities and Exchange Commission to settle charges for having gifted Chinese health-care professionals to boost sales from 2009 to 2013.

 

The Western District Prosecutors’ Office in Seoul confiscated several documents, including account books, in order to find out whether the rebates offered to doctors in the form of cash and other incentives could have been bribes. In an email to the Wall Street Journal, Novartis stated: “Novartis is cooperating with the investigation being conducted by the Seoul Western District Prosecutor’s office. Novartis is committed to the highest standards of ethical business conduct and regulatory compliance in all aspects of its work and takes any allegation of misconduct extremely seriously.”

Several multinational drugmakers have recently come under scrutiny in many countries for allegedly paying kickbacks and bribes in order to promote their drugs or products.

Bristol-Myers Squibb last year agreed to pay $14.7 million last year to settle the US Securities and Exchange Commission charges that gave cash and other gifts to Chinese doctors to increase scripts for its drugs, while others like Pfizer, Johnson & Johnson, Teva Pharmaceutical and AstraZeneca.

British drug giant GlaxoSmithKline was found guilty by a Chinese court of bribing doctors and hospitals and fined more than $490 million.

Jeffrey Newman represents whistleblowers