Novartis faces Japan criminal probe over Diovan’s advertising

As reported by the Financial Time, Novartis AG is about to face a criminal investigation of its marketing practices in Japan. The health ministry of the country filed a complaint against the company for possibly breaching some advertising rules while promoting its popular Diovan blood pressure medicine.

A formal criminal complaint was filed with the public prosecutors office in Tokyo on Thursday. The ministry officials commented the situation saying this was the first time such a step had been taken by them in response to the rumours of misleading advertising campaign followed by Novartis. The pharmaceutical company was accused of using marketing materials, which are exaggerating the drugs effectiveness. Novartis made an official statement today, explaining it took the actions of the Japanese ministry “extremely seriously” and promised to fully cooperate with Japanese authorities.

As Bloomberg reported earlier today, Novartis was said to have been promoting the Diovan drug as a treatment for cutting stoke risks. However, the company has not presented any sufficient evidence on these statements, which cast some doubts that the clinical data was inaccurate or even intentionally manipulated, as Kyoto Prefectural University of Medicine and Jikei University claim.

Such a breach is able to lead to both fines and jail terms. Still, the company has admitted its improper behaviour but has categorically denied such an aggressive advertising campaign was followed on falsified clinical data.

Novartis made an official statement apologizing for the situation. Here is what the company said: “We deeply apologize for the great worry and inconvenience we have caused to patients, their families, those in the medical field and the Japanese people.”

Earlier, as reported by the Financial Times, the pharmaceutical company admitted that one of its employees took part in the university studies without revealing this fact. This arouses some suspicions of a potential conflict of interest. Also, the October salaries of Novartis senior managers in Japan were cut over the incident, but the company said this was due to some sloppy internal controls.

The patent of the Novartis drug in Japan is due to expire this year.

According to Bloomberg, the current share price of Novartis AG is 0.69% up, and its one-year return rate is 26.18% up.