The former chief executive of the South Korean unit of Novartis and five other former and current managers have been indicted over allegations of making illegal payments to doctors amounting to 2.6 billion won ($2.3 million) for prescribing the company's drugs.
The Swiss pharmaceutical company expressed regret in a statement, but also said without elaborating that such conduct would not have been sanctioned by the "most senior management" at Novartis Korea.
"Novartis does not tolerate misconduct and we are already implementing a remediation plan in Korea based on the findings from our own investigation," the Basel-based company said. According to Paul Barrett, an official from Novartis International, the company could provide no other details on the case before the trial proceedings.
According to the Seoul Western District Prosecutors' Office, it also indicted 28 others, including 15 doctors and six publishers of medical journals, over their suspected involvement in transactions that took place between 2011 and January this year.
Under South Korean laws, drug companies are barred from providing doctors rebates or discounts for the drugs they prescribed. The prosecution said, Novartis' South Korean associates, including former Novartis Korea chief executive Moon Hak-sun, tried to skirt the laws by funding academic events organised by publishers of medical journals, where the invited doctors allegedly received kickbacks disguised as attendance fees.
According to Barrett, Moon served as the chief executive of Novartis Korea before he agreed to take a temporary leave of absence in April.
In a related development Novartis said it was not under investigation over bribery allegations in Turkey and that it considered the matter closed.
"Based on thorough internal and external counsel investigations we have concluded that all recent publicly and anonymously reported allegations relating to Novartis Turkey are unsubstantiated. We are not aware of any government authority investigating Novartis. We now consider this matter closed," it said in an emailed statement yesterday.
In April, the Ankara chief prosecutor's office said it was investigating the Turkish unit of Novartis after it was alleged that the company benefited from bribery.