Thursday, October 3, 2013
DJ: Novartis Sanctions Execs At Japan Unit Amid Drug Research Scandal
TOKYO--Novartis AG slapped sanctions on executives of its Japanese unit and revamped the local management team as the Swiss drug maker moved to contain the widening fallout from a scandal involving Japanese research on its blockbuster heart medicine Diovan.
"Clearly if something happens in one market, it impacts our reputation and that's something that we feel acutely all around the world," David Epstein, division head of Novartis Pharmaceuticals, said at a press conference in Tokyo on Thursday.
"We will work very hard to regain the trust," the head of Novartis's pharmaceutical division said in his second visit to Japan in two weeks, bowing deeply in front of a packed crowd of both international and Japanese journalists.
Japan is the drug maker's second-largest market, but Mr. Epstein said he doesn't expect a significant impact on the company's overall sales from some declines in Diovan sales that are already being observed. "I am much more worried about our reputation," he added.
The visit of the high-ranking official from the headquarters in Switzerland comes after a panel of experts commissioned by Japan's health ministry recently found that the drug maker may have violated Japanese laws in promotions for Diovan by citing flawed research--a breach that if confirmed could result in penalties for the company.
The panel was set up in August after two university-led investigations into Diovan-related research found that data had been altered to produce inaccurate results. The panel did not find who manipulated the data.
Novartis has previously said there was a conflict of interest in the Japanese studies since it knew that one of its employees, who later left the firm, took part in all the studies carried out by Japanese universities, and yet the person was identified only as a university lecturer in published articles.
On Thursday, Mr. Epstein said, "We do not have access to the data and therefore, are unable to confirm if there was data manipulation or who may have done it."
When pressed by a reporter if the company was involved in altering the data, he added: "There is actually no way to tell with certainty what happened many years ago." In previous statements, company officials have explicitly said Novartis was not involved in data manipulation.
Novartis on Thursday also announced that the previous head of the company's Japanese unit left the firm as of Monday, while Eric Cornut, global chief commercial officer at Novartis, will be appointed as chairman of the Japan operation. Mr. Epstein said two top officials in Japan will also take a 30% pay cut until the issue is resolved.
The drug maker will also set up a compliance advisory board in November that will be made up of medical, legal and ethics experts to strengthen its governance structure.