A Reuters and Washington Post article have confirmed that Novartis AG, and a former subsidiary (Alcon), have agreed to pay $347 million fines to “resolve allegations that the companies ran schemes to bribe public hospitals and clinics in Greece, Vietnam and South Korea”. Investigations from the U.S. Department of Justice and the U.S. Securities and Exchange Commission (SEC) reported alleged criminal and civil violations of the Foreign Corrupt Practices Act. The allegations included corrupt payments for prescriptions for Lucentis and corrupt payments related to artificial lenses. Mr. Brian A. Benczkowski, Assistant Attorney General of the US Justice Department’s Criminal Division stated that “Novartis AG’s subsidiaries profited from bribes that induced medical professionals, hospitals, and clinics to prescribe Novartis-branded pharmaceuticals and use Alcon surgical products, and they falsified their books and records to conceal those bribes. The resolutions announced today reflect the paramount importance of effective compliance programs and the department’s commitment to holding companies accountable when they fall short.”
In follow up to the settlement, U.S. Attorney Craig Carpenito for the District of New Jersey stated “the agreement we’re announcing today shows that there will be a heavy price paid by companies that violate our laws, whether at home or overseas”. Novartis’ CEO, Dr. Vasant Narasimhan, who joined the company in 2005, stated that the settlement fine of $347M will now focus on putting behind legacy issues. Novartis General Counsel, Shannon Thyme Klinger, Chief Ethics, Risk and Compliance Officer stated that “all outstanding FCPA (Foreign Corrupt Practices Act) investigations into the company are now closed”. Novartis’ market capitalisation, as of today’s writing, is valued $200,000,000,000. The Swiss company had booked FY2019 sales of $47,455,000,000, of which Lucentis sales in the same period (FY2019) were $2,086,000,000.
Reporting on the bribery allegations into Novartis, the Washington Post stated that Greek prosecutors in 2018 sent a report to parliament alleging that Novartis employees had paid tens of millions of euros in bribes to doctors and politicians to fix the price of its drugs at artificially high prices”. The reporting based in Greece, involved a scheme “to bribe employees of Greek state-owned and state-controlled hospitals and clinics by sponsoring their travel to international medical conferences, including events held in the U.S.”. Novartis agreed to pay a criminal penalty of $225 million, while its parent company agreed to pay more than $112 million in disgorgement and interest, representing the amount of illicit profits. The companies were also accused of falsifying books and records to conceal the payments, also reported from the New York Times.
