By John Miller
ZURICH (Reuters) – Novartis employees in South Korea gave kickbacks to doctors including paying for their travel abroad, the Swiss drug-maker said on Thursday as it faces scrutiny over illegal practices to boost sales.
The Basel-based company confirmed media reports that six current or former employees had been indicted by the Seoul Western District Prosecutors’ Office. It declined to comment on whether this might trigger a sales ban in the country, as reported by the Financial Times.
Novartis said some of its Korean staff had held meetings with doctors that violated its policies and were “inconsistent with our culture and the expectations society has for us.”
“Some associates supported travel to overseas congresses for some healthcare practitioners in a way that did not fully comply with self-regulation standards,” it added in a statement.
Despite acknowledging wrongdoing, Novartis said it rejected “the implication that the alleged conduct was sanctioned by the most senior management of Novartis Korea.”
The Yonhap news agency reported on the indictment on Thursday, citing industry sources that indicated a total of 23 people, including publishers of medical publications and doctors, had been indicted.
Seoul prosecutors could not be reached by Reuters for comment after office hours.
Novartis has faced numerous probes across the globe where authorities or whistle-blowers accuse it of bribing doctors to boost sales of pharmaceuticals products.
Its offices in South Korea were visited by local authorities in February in relation to suspected bribery.
In March, it agreed to pay more than $25 million to the U.S. government to settle civil charges that it bribed healthcare professionals in China.
Last year, it paid $390 million to settle U.S. charges that it paid speciality pharmacies illegal kickbacks.
Novartis is fighting a separate U.S. Justice Department prosecution that alleges it long lavished speaking fees and “opulent” meals, including a nearly $10,000 dinner for three, to get doctors to prescribe its drugs.
In April, Turkish prosecutors launched an investigation into bribery allegations, although Novartis said accusations were unfounded.
Chief Executive Officer Joe Jimenez said this year that legal scrutiny over kickbacks largely relates to “legacy issues” stemming from what he called Novartis’s historic “results-oriented” culture. Jimenez said he has since implemented measures to halt inappropriate behavior.
On Thursday, Novartis said it launched its own internal investigation immediately after being alerted to the Korean shortcomings. It has begun remedial measures and will discipline employees who broke rules, the company said.
“Novartis does not tolerate misconduct,” it said. “We will continue to invest significant efforts to fully embed a culture of compliance throughout our Korean organization.”
(Reporting by John Miller; Editing by Ben Hirschler and Adrian Croft)