Prosecutors Raid Novartis
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Prosecutors Raid Novartis
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Prosecutors Raid Novartis Office in Tokyo
Raid Part of Criminal Investigation
2/19/2014 WSJ by Kana Inakagi
TOKYO—Japanese prosecutors raided the Tokyo office of Novartis AG NOVN.VX -0.68% on Wednesday, as part of a criminal investigation into whether a unit of the Swiss drug giant violated the law by releasing misleading advertising for one of its drugs.
The move came after health regulators in January filed a criminal complaint with Tokyo prosecutors against Novartis. They alleged that the company misled consumers through advertisements that used research that the health ministry described as altered to support the benefits of its blood-pressure lowering drug Diovan.
The research was conducted by several Japanese universities, some of which later found that the results had been falsified. They also found that an employee of Novartis had participated in all of the studies—without acknowledging his affiliation in published papers.
In the raid prosecutors collected relevant documents that they'll examine to get to the bottom of the case, a person familiar with the investigation said. The Tokyo District Public Prosecutor's Office declined to comment. In a statement, Novartis said it will "cooperate fully with the Prosecutor's investigation."
During an earlier probe by the health ministry, Novartis officials denied the company's involvement in the research that the universities said was flawed, and also denied that it knew the data had been altered when it was touting the benefits of Diovan. The company has acknowledged the involvement of the company employee in the studies was a conflict of interest. On Thursday, a spokesman at the Japanese unit of Novartis said it cannot comment further since the investigation is ongoing
A finding that Novartis violated the law through misleading advertising could lead to punishment for the company and any employees found guilty. The penalties—a fine of up to ¥2 million ($19,500) and possible prison terms of up to two years—are relatively light, however.
Diovan has powered Novartis's sales for years, ranking as the company's best-selling product in 2010. As the drug began to lose patent protection around the world a year later, sales started to falter. Today, Novartis is betting on new treatments, including cancer drug Afinitor and multiple sclerosis pill Gilenya, to help offset declining revenue from Diovan.
Still, a prolonged criminal investigation could damage the company's reputation further in Japan, where sales of Diovan had already fallen sharply since the scandal broker last summer. Ahead the drug's patent expiration at the end of 2013, Diovan sales dropped to ¥22.03 billion in the quarter ended Sept. 30, down 16% from year earlier and down 24% from the same quarter of 2011, according to research firm IMS Health
Raid Part of Criminal Investigation
2/19/2014 WSJ by Kana Inakagi
TOKYO—Japanese prosecutors raided the Tokyo office of Novartis AG NOVN.VX -0.68% on Wednesday, as part of a criminal investigation into whether a unit of the Swiss drug giant violated the law by releasing misleading advertising for one of its drugs.
The move came after health regulators in January filed a criminal complaint with Tokyo prosecutors against Novartis. They alleged that the company misled consumers through advertisements that used research that the health ministry described as altered to support the benefits of its blood-pressure lowering drug Diovan.
The research was conducted by several Japanese universities, some of which later found that the results had been falsified. They also found that an employee of Novartis had participated in all of the studies—without acknowledging his affiliation in published papers.
In the raid prosecutors collected relevant documents that they'll examine to get to the bottom of the case, a person familiar with the investigation said. The Tokyo District Public Prosecutor's Office declined to comment. In a statement, Novartis said it will "cooperate fully with the Prosecutor's investigation."
During an earlier probe by the health ministry, Novartis officials denied the company's involvement in the research that the universities said was flawed, and also denied that it knew the data had been altered when it was touting the benefits of Diovan. The company has acknowledged the involvement of the company employee in the studies was a conflict of interest. On Thursday, a spokesman at the Japanese unit of Novartis said it cannot comment further since the investigation is ongoing
A finding that Novartis violated the law through misleading advertising could lead to punishment for the company and any employees found guilty. The penalties—a fine of up to ¥2 million ($19,500) and possible prison terms of up to two years—are relatively light, however.
Diovan has powered Novartis's sales for years, ranking as the company's best-selling product in 2010. As the drug began to lose patent protection around the world a year later, sales started to falter. Today, Novartis is betting on new treatments, including cancer drug Afinitor and multiple sclerosis pill Gilenya, to help offset declining revenue from Diovan.
Still, a prolonged criminal investigation could damage the company's reputation further in Japan, where sales of Diovan had already fallen sharply since the scandal broker last summer. Ahead the drug's patent expiration at the end of 2013, Diovan sales dropped to ¥22.03 billion in the quarter ended Sept. 30, down 16% from year earlier and down 24% from the same quarter of 2011, according to research firm IMS Health