Novartis charged for Bribes: Pharma Giant to pay $336 million for Resolution

Switzerland-based Novartis AG and Alcon will pay a fine to settle the US Civil and Criminal charges for bribing doctors, clinics and hospitals in Greece and Vietnam to prescribe their drugs and use their surgical products.

A hefty fine of around $336 million is to be paid by Novartis Greece, a subsidiary of the Swiss drug giant for violating the Foreign Corrupt Practices Act (FCPA), a U.S. anti-bribery law. The drug company had earlier admitted that it used bribery schemes aimed at increasing sales of its pharmaceutical products.

Novartis had financed the travel of employees of state-owned hospitals even on their international medical conferences to the US “as a means to bribe these officials” between 2012 and 2015, said the US Justice Department.

The firm also confirmed that it contributed money to health care providers as part of an epidemiological analysis that was “used as a tool” for illegal incentives to boost drug purchases in 2009 and 2010, the Department stated.

Alcon AG, which had merged with Novartis in 2011 and was spun off last year, will pay a criminal fine of $8.9 million. The firm said that it was pleased to resolve the investigations. Alcon designed a scheme to improve the selling of its artificial lenses used to cure cataracts and other diseases. Shown as consultancy, publicity and human resources on the books, the seller received reimbursed up to 50 percent of these costs.

“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,” said US Assistant Attorney General Brian Benczkowski.

“Novartis Hellas, a Greece-based unit of the Swiss drugmaker, entered a deferred prosecution agreement and will pay a $225 million criminal fine. Novartis will also pay $112.8 million to settle related civil charges by the U.S. Securities and Exchange Commission.”
The U.S. Department of Justice Statement

Referring to the settlement, Novartis General Counsel, Shannon Thyme Klinger said, “Today’s settlements represent another milestone in our commitment to resolving legacy compliance issues and ensuring that Novartis truly lives its values.”