The Japanese government has said it may impose a 15-day suspension on Novartis’ local unit as a punishment for failing to report side effects with its drugs, according to local media reports.
The company is staying tight-lipped about the reasons for the unusual action by the Ministry Of Health, Labour and Welfare (MHLW), although it has confirmed it has received a “pre-notification of business suspension order”.
The Japan Times reports that Novartis Pharmaceuticals KK admitted in December that it had failed to report more than 3,200 adverse events among patients taking drugs made by the company, and has been given one opportunity to explain why before the suspension comes into effect.
While Novartis insists that the suspension will not have a major effect on its operations in Japan – saying any financial impact would be manageable – it would be a major embarrassment for the firm and comes on the tail of a series of other scandals in the country.
Last year, prosecutors in Japan laid formal charges against Novartis in an ongoing investigation about the manipulation of clinical data, centring on studies of the company’s blood pressure treatment Diovan (valsartan) which were alleged to have been tampered with to make the drug look more effective than competitors on the market.
Meanwhile, the company has also come under scrutiny amid claims that its staff acted inappropriately in data collection activities relating to its leukaemia drug Tasigna (nilotinib), a probe that resulted in three senior management figures resigning from the Japanese unit including former head Yoshiyasu Ninomiya.
Novartis said it would “take all necessary steps to ensure that Japanese patients are not adversely affected” during the suspension. In its 2014 annual report, it details measures taken to improve its procedures in Japan and also in China where it was also drawn into the investigation that resulted in GlaxoSmithKline being fined last year.
“In Japan, we made several changes during 2014, including replacing the Japanese senior management team and requiring additional compliance training for all associates there,” it says.
Meanwhile, in China Novartis indicates it has changed “how we manage meetings with Chinese healthcare organizations and funding for them,” whilst introducing “improved financial controls and a review of incentives for our salesforce.”
Japan accounted for around $4bn or 7% of Novartis’ global group sales of $58bn in 2014.