The Korea Times close
National
  • Politics
  • Foreign Affairs
  • Multicultural Community
  • Defense
  • Environment & Animals
  • Law & Crime
  • Society
  • Health & Science
Business
  • Tech
  • Bio
  • Companies
Finance
  • Companies
  • Economy
  • Markets
  • Cryptocurrency
Opinion
  • Editorial
  • Columns
  • Thoughts of the Times
  • Cartoon
  • Today in History
  • Blogs
  • Tribune Service
  • Blondie & Garfield
  • Letter to President
  • Letter to the Editor
Lifestyle
  • Travel & Food
  • Trends
  • People & Events
  • Books
  • Around Town
  • Fortune Telling
Entertainment
& Arts
  • K-pop
  • Films
  • Shows & Dramas
  • Music
  • Theater & Others
Sports
World
  • SCMP
  • Asia
Video
  • Culture
  • People
  • News
Photos
  • Photo News
  • Darkroom
  • The Korea Times
  • search
  • Site Map
  • E-paper
  • Subscribe
  • Register
  • LogIn
search close
  • The Korea Times
  • search
  • Site Map
  • E-paper
  • Subscribe
  • Register
  • LogIn
search close
Finance
  • Companies
  • Economy
  • Markets
  • Cryptocurrency
Mon, July 4, 2022 | 06:17
Novartis Korea mired in illegal kickback scandal
Posted : 2016-08-11 16:35
Updated : 2017-04-27 19:16
Print Preview
Font Size Up
Font Size Down
Six executives indicted for offering kickbacks to doctors

By Lee Hyo-sik

Novartis Korea is facing the biggest crisis in its 30-year history as six former and current executives have been indicted on charges of offering kickbacks to doctors for years in return for prescribing its products.

The latest indictment will likely tarnish the corporate image of the Swiss pharmaceutical giant and adversely affect its business dealings in Asia's fourth-largest economy, industry analysts said.

According to the Seoul Western District Prosecutors' Office, Thursday, investigators indicted former company CEO Moon Hak-sun and five other executives, as well as 28 doctors and heads of medical journals on charges of giving and receiving cash and other kickbacks.

Novartis Korea, established in 1983, provided a total of 18.1 billion won ($16.5 million) to five medical journals between 2011 and 2015, according to the prosecution. On behalf of Novartis, the journals then gave 2.6 billion won in cash to dozens of doctors for writing articles or taking part in seminars.

Investigators had sought to bring charges against two former CEOs who managed the Korea unit of the world's second-largest multinational drug maker from 2011 to 2015. However, they had to drop the cases because the two refused to return to Korea.

Novartis fined for offering bribes
Novartis fined for offering bribes
2017-04-27 16:07  |  Law & Crime

Instead, Moon, the first Korean CEO who took the company helm last September, has been a primary figure since prosecutors raided company offices in February. Moon was then relieved of his duties in April and summoned for questioning. Since May, Klaus Ribbe has been heading Novartis Korea.

One industry analyst told The Korea Times that Moon is a scapegoat for his non-Korean predecessors, saying that most of the irregularities took place under their watch.

"The indictment will certainly hurt Novartis' corporate image and deal a blow to its operations in Korea," said the analyst, who declined to be named. "I don't think doctors and others in the medical industry are eager to do business with the Swiss drug maker."

Novartis Korea has dismissed the prosecution's charges, saying that its senior managers were unaware of the provision of kickbacks, known in the pharmaceutical industry as "rebates," to doctors. It claims that only a few low-ranking employees arbitrarily orchestrated the scheme, amounting to nearly 20 billion won.

"We have acknowledged and regret that certain associates in Korea conducted small medical meetings and other scientific-related activities through trade journals, in violation of our policies and inconsistent with our culture and the expectations society has for us and our industry," CEO Klaus Ribbe said.

Some associates also supported travel to overseas congresses for some healthcare practitioners in a way that did not fully comply with self-regulation standards set by the Korean Research-based Pharmaceutical Industry Association (KRPIA), he said.

"However, we reject the implication that the alleged conduct was sanctioned by the most senior management of Novartis Korea," the CEO said, indicating that the company will fight the prosecution charges in court.

However, prosecutors are confident that they can prove CEOs and other senior managers at Novartis Korea were aware of and systemically involved in the kickback scheme.

"Most drug makers indicted for offering rebates argue that senior managers were not involved. It is the result of some individuals' deviant behavior," a prosecution official said. "But we have secured solid evidence to prove otherwise. The truth will be revealed in court."



Emailleehs@ktimes.com Article ListMore articles by this reporter
 
LG
  • Korea's bio industry at turning point after pandemic
  • Declining approval rating feared to dampen Yoon's political drive
  • Can Chinese demand cushion blow of US recession on Asian economies?
  • Umbrella union stages massive rallies in Seoul amid scorching heat
  • Not just another crypto-bubble
  • Concerns grow over COVID-19 resurgence
  • More than six out of 10 South Koreans willing to fight for country
  • Inflation expected to accelerate further in 2nd half
  • Japanese media focuses on Yoon's 'sales diplomacy'
  • N. Korea lashes out at closer security ties among S. Korea, US, Japan
  • Cha Eun-woo eyes starring role in 'K-Pop: Lost in America' Cha Eun-woo eyes starring role in 'K-Pop: Lost in America'
  • BTS' J-Hope tops iTunes charts in 84 countries BTS' J-Hope tops iTunes charts in 84 countries
  • Moon Geun-young to make directorial film debut at BIFAN Moon Geun-young to make directorial film debut at BIFAN
  • Lee Jung-hyun returns to big screen after childbirth Lee Jung-hyun returns to big screen after childbirth
  • BLACKPINK's 'Ddu-du Ddu-du' sets YouTube views record for K-pop group BLACKPINK's 'Ddu-du Ddu-du' sets YouTube views record for K-pop group
DARKROOM
  • Afghanistan earthquake killed more than 1,000

    Afghanistan earthquake killed more than 1,000

  • Divided America reacts to overturn of Roe vs. Wade

    Divided America reacts to overturn of Roe vs. Wade

  • Namaste: Yogis to celebrate International Yoga Day

    Namaste: Yogis to celebrate International Yoga Day

  • Poor hit harder by economic crisis

    Poor hit harder by economic crisis

  • Roland Garros 2022

    Roland Garros 2022

The Korea Times
CEO & Publisher : Oh Young-jin
Digital News Email : webmaster@koreatimes.co.kr
Tel : 02-724-2114
Online newspaper registration No : 서울,아52844
Date of registration : 2020.02.05
Masthead : The Korea Times
Copyright © koreatimes.co.kr. All rights reserved.
  • About Us
  • Introduction
  • History
  • Location
  • Media Kit
  • Contact Us
  • Products & Service
  • Subscribe
  • E-paper
  • Mobile Service
  • RSS Service
  • Content Sales
  • Policy
  • Privacy Statement
  • Terms of Service
  • 고충처리인
  • Youth Protection Policy
  • Code of Ethics
  • Copyright Policy
  • Family Site
  • Hankook Ilbo
  • Dongwha Group