After years of investigation by US authorities, Novartis admitted bribing doctors to prescribe more of its pharmaceuticals in Greece, South Korea, China and Vietnam and agreed to pay $347 million for violating the US Foreign Corrupt Practices Act.
The deal, however, does not include allegations that the Swiss pharmaceutical giant was giving Greek politicians kickbacks to promote its drugs and surgical products to public hospitals in the period 2012-2015.
Of the total amount Novartis must pay, $234 million is in the form of fines, and some $113 million will go to the Securities and Exchange Commission.
The US Department of Justice issued a statement after the deal was reached, which is excerpted below:
According to its admissions, between 2012 and 2015, Novartis Greece conspired with others to violate the FCPA by engaging in a scheme to bribe employees of state-owned and state-controlled hospitals and clinics in Greece in order to increase the sale of Novartis-branded pharmaceutical products.
Specifically, Novartis Greece paid for employees of state-owned and state-controlled hospitals and clinics to travel to international medical congresses, including events held in the United States, as a means to bribe these officials in exchange for increasing the number of prescriptions they wrote for Lucentis, a prescription drug that Novartis Greece sold. In furtherance of the scheme, Novartis Greece employees traveled to the United States, and, while located in the United States, facilitated the provision of the improper benefits to publicly-employed Greek health care providers.
In connection with the resolution, Novartis Greece also admitted that between 2009 and 2010, Novartis Greece made improper payments to health care providers in connection with an epidemiological study that was intended to increase sales of certain Novartis-branded prescription drugs.
The epidemiological study was used as a vehicle to make improper payments to the health care providers in order to increase sales of certain Novartis-branded prescription drugs, and Novartis Greece employees recognized that many participating health care providers believed that they were being paid in exchange for writing prescriptions of Novartis products and not for providing data as part of a clinical study.
The Novartis Scandal in Greece
Novartis’ actions were probed in the US for several years. In February of 2018, a Greek prosecutor brought up a case as well, according to which about 30 Greek officials were involved in taking bribes from Novartis. The issue went before Parliament, since the list of suspects included ten former top public officials, including two prime ministers and eight ministers.
Then-Deputy Justice Minister Dimitris Papangelopoulos spoke of the “biggest scandal in the history of the modern Greek state,” estimated to amount to approximately 50 billion euros, in the period 2000-2015. Three former Novartis employees came forth as protected witnesses and named the politicians who were allegedly involved.
Main opposition New Democracy Party spoke of a fabrication intended as a smokescreen for the unpopular deal that then-Prime Minister Alexis Tsipras was about to sign over the name of the Former Yugoslav Republic of Macedonia. Furthermore, ND claimed that the so-called Novartis scandal was a conspiracy to undermine the main opposition party.
A Parliamentary committee was formed to probe the ten senior politicians while the prosecutor’s office was investigating the allegations. However, it turned out that none of the three witnesses had any evidence of the politicians taking bribes, and their testimonies were based only on personal assumptions.
Furthermore, the gross sales of Novartis pharmaceuticals during that period were far less than the “billions” in bribes to politicians that were alleged to have been paid.
One of the three witnesses was found to have profited from the Novartis illegal activities and charges were filed against him. In the end, the Parliamentary committee and the prosecutor’s office found no incriminating evidence against the politicians.
In September 2019, a Parliamentary probe into former deputy Papangelopoulos was initiated as former corruption prosecutor Eleni Raikou accused him of intervening in her work investigating the Novartis case by demanding that specific politicians be prosecuted.
The Parliamentary probe on Papangelopoulos is continuing, with him accusing the government of prosecuting him in retaliation.