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Novartis Offices Searched in Italy Flu Vaccine Probe

June 20 (Bloomberg) -- Novartis AG’s offices in Italy were searched by authorities seeking information on the pricing of two influenza vaccines, adding to the Swiss drugmaker’s woes in the country.

Italian police searched two of the company’s sites as part of a probe into possible fraud related to the purchase of the vaccines by the Health Ministry, one for a pandemic in 2009, according to an e-mailed statement from the police. The police allege Novartis inflated the cost of an additive to the vaccines, known as MF59, by six-fold.

The case stems from a tax agency review into intergroup transfer pricing, the police said. The damages to the country could be more than 16 million euros ($22 million), they said. Novartis, Europe’s biggest drugmaker, confirmed a visit by authorities today to its sites in Siena and Origgio and said it’s cooperating fully with the investigation.

“Novartis is committed to high standards of ethical business conduct and regulatory compliance in all aspects of its work,” the Basel-based company said today in an e-mailed response to questions.

Novartis is also being probed for failure to oversee employees’ actions, according to the police.

The company last month denied allegations that it engaged in anti-competitive practices with Roche Holding AG, also based in Basel, related to the companies’ eye treatment Lucentis. Italian authorities are seeking 1.2 billion euros in damages from the two companies after the health ministry said they agreed to limit competition on eye-drug sales.

To contact the reporter on this story: Kristen Hallam in London at khallam@bloomberg.net

To contact the editors responsible for this story: Phil Serafino at pserafino@bloomberg.net Thomas Mulier, Marco Bertacche

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