Swiss pharmaceutical giant Novartis has been fined 55.1 billion won ($49 million) and given a six-month suspension of insurance coverage benefits for nine products in South Korea for bribing local doctors.
Korea’s Ministry of Health and Welfare said Thursday that it has decided to lift insurance coverage for nine variations of two Novartis drugs -- Alzheimer’s drug Exelon and bone cancer therapy Zometa -- and impose administrative fines on 33 variations of 15 drugs.
The headquarters of Swiss pharmaceutical company Novartis in Basel, Switzerland (AP-Yonhap)
The punitive measures came as Novartis Korea was found to have provided kickbacks worth 2.6 billion won from 2011 to 2016 to doctors in exchange for prescribing its drugs to boost the firm’s sales.
Korean prosecutors had indicted six high-level officials at Novartis Korea including former Chief Executive Moon Hak-sun in August 2016 over the allegations.
"We acknowledge the Ministry of Health and Welfare‘s announcement," Novartis Korea said in a statement. "We expect the ministry to make a final decision by the end of May and understand there may be a grace period before the effective date of up to three months," it said.
The Health Ministry decided to exclude Novartis’ blockbuster cancer treatment Gleevec from the insurance suspension on concerns that patients with chronic myeloid leukemia would be unable to find replacement drugs.
Earlier this month, local civic groups representing patients with leukemia and gastrointestinal stromal tumors held protests in Seoul, urging the ministry to find alternative ways to penalize the drugmaker without blocking patient access to Gleevec.
The Health Ministry’s measures are considered tougher than the Ministry of Food and Drug Safety’s punitive orders issued against Novartis Korea last month.
The Drug Ministry had slapped the Swiss company with a fine of 200 million won for 30 drugs and a three-month sales ban on 12 variations of three drugs including Exelon.
The Novartis Korea bribery case is still pending at the Seoul Western District Court. The Seoul-based Novartis branch has been operating under temporary CEO Klaus Ribbe since April 2016 when its former chief Moon Hak-sun was removed from his post.
Novartis is one of the top-selling foreign pharmaceutical companies in Korea, the Swiss drugmaker’s 10th-largest market worldwide.
By Sohn Ji-young (jys@heraldcorp.com)