Exclusive: Novartis investigating $85 million bribery allegations in Turkey

Wed Mar 30, 2016 3:47am EDT
 
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By Ben Hirschler

LONDON (Reuters) - An anonymous whistleblower has accused Swiss drugmaker Novartis (NOVN.S: Quote) of paying bribes in Turkey through a consulting firm to secure business advantages worth an estimated $85 million, according to a Feb. 17 email seen by Reuters.

The alleged benefits, which Novartis confirmed it was investigating, included getting medicines added to lists, or formularies, of drugs approved for prescription in government-run hospitals, and avoiding price cuts in other countries by securing government approval to change the names of two drugs.

The anonymous sender's 5,000-word email to Novartis Chief Executive Joe Jimenez and Srikant Datar, chairman of its audit and compliance committee, said Novartis had paid Alp Aydin Consultancy the equivalent of $290,000 plus costs during 2013 and 2014, before the Turkish Social Security Institution (SSI) launched an investigation, leading the drugmaker to end the association.

Novartis, which said it was committed to the highest standards of ethical business conduct, confirmed Aydin had consulted for it in the past and no longer did so. The pharmaceutical giant also said it was investigating the allegations Aydin had passed on funds to Turkish healthcare officials, and that Novartis Turkey had hired relatives of high-prescribing doctors.

"We take any allegation of inappropriate behavior extremely seriously and investigate all allegations thoroughly. As a matter of policy we don’t comment on such investigations even if the complainant decides to make them public," said company spokesman Eric Althoff.

Officials at the SSI and Aydin did not immediately respond to requests for comment.

Novartis' difficulties in Turkey highlight the problems faced by healthcare companies as anti-corruption authorities around the world investigate industry practices.

Last week Novartis agreed to pay more than $25 million to settle a U.S. Securities and Exchange Commission (SEC) case over bribery in China.   Continued...

 
The logo of Swiss pharmaceutical company Novartis is seen on its headquarters building in Basel, Switzerland October 27, 2015. REUTERS/Arnd Wiegmann