Scandalous Novartis may be kicked out

By Park Jae-hyuk

Novartis seems to be running the risk of being removed from the Korean market over a bribery charge involving its executives and employees unearthed early 2016.

According to industry officials, Sunday, Korean health authorities consider imparting punitive measures on the multinational drug maker so that its drugs including blockbuster anticancer drug Glivec will not be covered by health insurance.

Prosecutors searched the Swiss pharmaceutical giant’s Korean office last year over allegations of offering kickbacks to doctors. It illegally gave money to doctors in 2011 as well, in exchange for more prescriptions of its drugs.

The alleged bribes given to doctors between 2011 and 2016 have totaled about 2.6 billion won ($2.28 million). Six Novartis executives have been indicted without detention and legal proceedings are now underway.

Aside from the trial, the Ministry of Food and Drug Safety imposed a three-month sales suspension on nine Novartis drugs in February and fined the company 200 million won.

Given that the suspension is not applied to the products which are already supplied to retailers, however, the Korean government seemingly considers taking more stringent measures.

If a drug has substitutes, the Ministry of Health and Welfare can keep it off the health insurance reimbursement list for a year for the first violation of the anti-bribery law and can exclude it forever for the second offense.

The two-strike rule, which was introduced in 2014 to deal with widespread kickbacks among drug companies and hospitals, would deal a severe blow to Novartis whose 18 of 41 drugs related to the breach have alternatives including Glivec.

Suspended drugs would struggle to find demand because non-reimbursed drugs are very expensive. If patients want to keep using these drugs, they have to pay the total costs ─ and would pay more for a specific drug in case there are viable alternatives.

Experts point out that Novartis would lose its presence in the Korean market if the government imposes the disciplinary steps just as it has vowed to do.

But the Seoul administration would also have to agonize over the two-strike rule mostly because of complaints regarding Glivec.

Although more than 30 alternatives are available in Korea, about 60 percent of chronic leukemia patients are using the product for its effectiveness and certified safety. So those who suffer from leukemia have opposed the punitive step on Glivec.

Last Tuesday, an organization of leukemia patients delivered a document to the health authorities to show the concerns of patients over the issue. They said the patients may become innocent victims of the government’s possible measure.

The government vowed to adhere to its no exceptions principle, but also said it will continue to seek advice from experts.

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