http://www.fiercepharma.com/story/sources-say-novartis-investigating-sales-scheme-india/2013-06-11
UPDATED: Novartis acknowledges probe of sales scheme in India
Drugmaker says some employees have been fired
Novartis ($NVS), already facing kickback allegations in the U.S., is now sorting out a sales scandal in India that has reportedly led it to fire 18 employees.
Sign up for our FREE newsletter for more news like this sent to your inbox!PharmAsia News, which broke the story based on unnamed sources, said the Swiss drugmaker discovered sales executives padding invoices and then using incentive payments to buy the diabetes drug Galvus from wholesalers so they could hit their sales targets. The company is reportedly looking into the issue in a country-wide investigation that includes allegations that wholesalers were extended credit for up to a year as an inducement to load up on supplies of the drug.
It is certainly not the first time Novartis sales reps and executives have been accused of using unethical methods to boost sales. In April, prosecutors in the U.S. sued the company, accusing it of offering "disguised" kickbacks to pharmacies for switching patients to one of its drugs. The lawsuit claims the scheme led thousands of transplant recipients to start using the Novartis immunosuppressant Myfortic and stop using competitors' products like Roche's ($RHHBY) CellCept. Novartis also allegedly rewarded pharmacies that kept patients from dropping Myfortic for another treatment.
When the suit was filed, prosecutors pointed out that under a 2010 settlement with federal authorities, Novartis had signed a 5-year Corporate Integrity Agreement. The CIA laid out plans by Novartis to establish programs that were supposed to quash the culture of deceit and avoid further underhanded practices.
- read the PharmAsia News story
The company today acknowledged the investigation and said that some employees had already been canned, but it said it could not give details of the investigation or terminations.
In a statement emailed to FiercePharma, the company said, "Novartis is aware of allegations relating to activities undertaken by a small group of associates in India. We take these allegations very seriously and Novartis India is conducting a thorough ongoing investigation, and can confirm that immediate disciplinary action, including termination of contracts, has already taken place based on our initial findings." It goes on to say that it expects employees to follow the Novartis Code of Conduct and that it does not tolerate deviation at any level.
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FiercePharma is now on LinkedIn. We’ve launched a new group that allows members to read, share and discuss the latest news in the pharmaceutical industry. Join readers, editors and industry insiders on LinkedIn for access to polls, commentary and a like-minded community. Join the group.It is certainly not the first time Novartis sales reps and executives have been accused of using unethical methods to boost sales. In April, prosecutors in the U.S. sued the company, accusing it of offering "disguised" kickbacks to pharmacies for switching patients to one of its drugs. The lawsuit claims the scheme led thousands of transplant recipients to start using the Novartis immunosuppressant Myfortic and stop using competitors' products like Roche's ($RHHBY) CellCept. Novartis also allegedly rewarded pharmacies that kept patients from dropping Myfortic for another treatment.
When the suit was filed, prosecutors pointed out that under a 2010 settlement with federal authorities, Novartis had signed a 5-year Corporate Integrity Agreement. The CIA laid out plans by Novartis to establish programs that were supposed to quash the culture of deceit and avoid further underhanded practices.
- read the PharmAsia News story
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