Novartis faces further prosecution on bribery

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Novartis faces further prosecution on bribery

By Park Hyong-ki

Swiss pharmaceutical giant Novartis' Korean subsidiary will further face a probe and indictment as the country's antitrust agency has decided to file a complaint with the prosecutor over the foreign-invested company's bribery of local doctors.

Those local doctors, along with Novartis' Korean executives and sales agents, are also expected to be summoned for questioning.

The Fair Trade Commission (FTC) has slapped a fine of 500 million won on Novartis after the state agency uncovered that the company offered kickbacks worth 7.6 billion won to doctors from March 2011 to August 2016, it said Thursday.

The drug maker used the money to provide expenses for doctors' trip to overseas academic forums in exchange for favors including issuing more prescriptions of its drugs.

Some of the money were also used to provide personal sponsorship, which is clearly illegal, according to the FTC.

Under the fair competition law, companies are allowed to donate to academic associations and conferences for further research and development. However, it is against the law to provide personal expenses.

Novartis broke the rule on all accounts as it went far over the limits to list doctors, who were highly likely to prescribe its drugs, and approached and offered them financial assistance for overseas travel to academic conferences.

The FTC said that it will further draw up measures with related ministries to prevent this kind of illicit acts again in the industry.

Novartis Korea said that it respects the FTC's decision, admitting that its action did "not fully comply with industry standards and was in violation of its own policies."


The company added that it has stopped funding healthcare professionals' overseas trip to academic forums.

"We have also reinforced our compliance function, re-designed the field force evaluation system and are currently developing a new customer-facing model to drive performance with integrity," it said in a press statement.

"Our commitment to bringing life-changing medicines to patients in Korea remains unchanged."

The antitrust agency's fine on Novartis follows the health ministry's punitive measures against the company two months ago.


Novartis was then charged with offering 2.59 billion won to doctors from January 2011 to January 2016 in return for more prescriptions of its drugs.

This also follows prosecutors' indictment of six Novartis executives on charges of bribery last year.

Prosecutors have indicted six executives, including Novartis Korea's former chief Moon Hak-sun. Moon joined Novartis in 1994 as a clinical test manger, and assumed various positions at Novartis Korea and the Swiss giant's overseas units.


By Park Hyong-ki

Swiss pharmaceutical giant Novartis' Korean subsidiary will further face a probe and indictment as the country's antitrust agency has decided to file a complaint with the prosecutor over the foreign-invested company's bribery of local doctors.

Those local doctors, along with Novartis' Korean executives and sales agents, are also expected to be summoned for questioning.

The Fair Trade Commission (FTC) has slapped a fine of 500 million won on Novartis after the state agency uncovered that the company offered kickbacks worth 7.6 billion won to doctors from March 2011 to August 2016, it said Thursday.

The drug maker used the money to provide expenses for doctors' trip to overseas academic forums in exchange for favors including issuing more prescriptions of its drugs.

Some of the money were also used to provide personal sponsorship, which is clearly illegal, according to the FTC.

Under the fair competition law, companies are allowed to donate to academic associations and conferences for further research and development. However, it is against the law to provide personal expenses.

Novartis broke the rule on all accounts as it went far over the limits to list doctors, who were highly likely to prescribe its drugs, and approached and offered them financial assistance for overseas travel to academic conferences.

The FTC said that it will further draw up measures with related ministries to prevent this kind of illicit acts again in the industry.

Novartis Korea said that it respects the FTC's decision, admitting that its action did "not fully comply with industry standards and was in violation of its own policies."


The company added that it has stopped funding healthcare professionals' overseas trip to academic forums.

"We have also reinforced our compliance function, re-designed the field force evaluation system and are currently developing a new customer-facing model to drive performance with integrity," it said in a press statement.

"Our commitment to bringing life-changing medicines to patients in Korea remains unchanged."

The antitrust agency's fine on Novartis follows the health ministry's punitive measures against the company two months ago.


Novartis was then charged with offering 2.59 billion won to doctors from January 2011 to January 2016 in return for more prescriptions of its drugs.

This also follows prosecutors' indictment of six Novartis executives on charges of bribery last year.

Prosecutors have indicted six executives, including Novartis Korea's former chief Moon Hak-sun. Moon joined Novartis in 1994 as a clinical test manger, and assumed various positions at Novartis Korea and the Swiss giant's overseas units.


Park Hyong-ki hyongki@koreatimes.co.kr


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