Novartis Ads for Diovan May Have Violated Japan Law, Panel Says

Novartis AG (NOVN) may have violated a Japanese law by promoting its Diovan hypertension medicine as a treatment for cutting stroke risks without sufficient evidence, a breach which could lead to fines and jail terms, according to a government panel.

Novartis may have boosted sales by citing flawed data, the panel, formed by the health ministry to probe claims of the inaccurate research, said in an interim report yesterday. Studies had found that Diovan, approved in Japan as a blood-pressure drug, also cut the risk of stroke. Kyoto Prefectural University of Medicine and Jikei University, which conducted two of the five studies, all initiated by doctors, subsequently said the data could have been manipulated.

Medical journals including the Lancet and European Heart Journal this year retracted the studies on Diovan, Novartis’s second-best seller with $4.4 billion in 2012 sales. The ministry’s panel, which is probing the drugmaker’s involvement and how data manipulation occurred, also said it found a conflict of interest regarding funds given by Novartis to Jikei and Kyoto Prefectural universities.

“The competition for hypertension drugs must have been fierce when Diovan was approved, and any drugmaker would have thought additional evidence to differentiate its products could help increase sales,” the panel said in its report. “While the motive by Novartis is obvious, the doctors’ purpose for the study is unclear. The government should conduct an on-site inspection and take stern action.”

Novartis, which said it found no evidence that its former workers manipulated data, will cooperate fully on further investigations to determine what happened, Yoshiyasu Ninomiya, head of the Japan unit, said in a statement yesterday.

Jail Term

Individuals guilty of violating the law on over-promotion of drugs face a jail term of as long as two years, according to the health ministry’s website. Companies can be fined as much as 2 million yen ($20,000) and have their operations suspended.

Japan accounted for $5.4 billion, or 9.5 percent, of Novartis’s $56.7 billion in revenue last year, according to data compiled by Bloomberg.

Novartis, which donated 570 million yen to Kyoto Prefectural and Jikei universities for running classes, also expected part of the funds to be used to pay for the drug trials, the panel said. The Basel, Switzerland-based drugmaker was therefore a sponsor of the studies, it said.

Remains Unclear

In July, Novartis said some former employees of its Japanese unit who worked on the Diovan trials failed to declare in the studies their affiliations to the drugmaker. A report commissioned by Novartis found no evidence that the former workers manipulated scientific data, it said at the time.

The ministry’s panel said it remains unclear who altered the data and for what purpose.

The universities’ investigations were sparked by a doctor at Kyoto University, who wasn’t involved in the studies and questioned the validity of the data last year, the panel said.

The five trials were conducted from 2001 to 2004 in Japan at Tokyo’s Jikei University; Chiba University, east of Tokyo; Kyoto Prefectural University of Medicine in western Japan; Shiga University of Medical Science and Nagoya University in central Japan.

To contact the reporter on this story: Kanoko Matsuyama in Tokyo at kmatsuyama2@bloomberg.net

To contact the editor responsible for this story: Jason Gale at j.gale@bloomberg.net

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