GENEVA: Swiss drugmaker Novartis said yesterday that it has reached a deal with US authorities to pay US$25 million to settle claims that its Chinese units bribed health care professionals to boost sales, including with family trips to Niagara Falls.
The drug giant agreed to pay the hefty fine “without admitting or denying” guilt, according to documents published by the US Securities and Exchange Commission.
According to the SEC findings, Novartis’s China-based units had between 2009 and 2013 “provided things of value” mainly to doctors and other health care professionals.
“These payments took varied forms and were intended to … increase sales of Novartis pharmaceutical products,” said an SEC document.
The market regulator said health care providers were for instance invited on expensive trips, which in many cases “did not include an educational purpose or the scientific/educational components were minimal in comparison to the sightseeing or recreational activities.”
In 2009, Novartis subsidiary Sandoz China for instance paid for 25 health care workers to take part in a surgical conference in Chicago, inviting along their spouses and taking the group on an excursion to the Niagara Falls. Each participant also received US$150 in pocket money, the SEC document said.
Employees and managers at the involved units had tried to “conceal the true nature of the transactions,” by for instance “improperly recording payments as legitimate expenses” for things like travel, entertainment, conferences and medical studies.
