Switzerland-based pharma behemoth settles $390 million U.S. claim, ordered to change business practices in Japan

The Japan Times reports that the nation’s Ministry of Health, Labor, and Welfare will serve Tokyo-based Novartis Pharma K.K. with a business improvement order, possibly as early as December 2015.

“The health ministry will censure a Japanese unit of Swiss pharmaceutical giant Novartis AG for failing to report serious side effects from some of its drugs within a certain period of time,” sources close to the matter told the Times.

The case centers on side effects observed in around 5,500 patients, “which should have been reported to the state within a few weeks of discovery,” according to the daily.

It’s the third administrative penalty in less than two years against the subsidiary of Novartis AG over its reporting delays.

The drugmaker reportedly told the ministry the delay was due to an in-house system failure that occurred at the beginning of this year. Company officials declined comment when contacted by Japan Times reporters.

The health ministry levied a 15-day business suspension order against Novartis Pharma K.K. in February 2015 and a business improvement order in July 2014 for failing to promptly report health problems caused by its leukemia drugs. In Japan, pharmaceutical firms are required by law to report to the state significant side effects of their drugs within 30 days of discovery.

In July 2014, the company and a former employee were indicted on charges of causing a medical research team to release, in 2011, data manipulated in favor of the company’s blood pressure-lowering drug Diovan.

Stateside, meanwhile, Novartis AG’s bank account suffered a minor blow after the company settled a whistleblower lawsuit against it.

Idaho Attorney Lawrence Wasden announced on December 4, 2015 the Gem State had joined states across the U.S. in settling the lawsuit against the pharmaceutical conglomerate, “which had been accused of sending kickbacks to some pharmacies in exchange for recommending a drug to Medicaid and Medicare patients,” says the Boise Weekly.

Novartis will pay $390 million in total for this settlement.

The Boise Weekly reports that, according to prosecutors, “Novartis paid some pharmacies to encourage the sale of Exjade for the treatment of chronic iron overload due to blood transfusions.” Prosecutors specified that Novartis paid the kickbacks “to corrupt the interactions with patients by inducing the pharmacies to exaggerate dangers of not taking Exjade, emphasize Exjade’s benefits and downplay the severity of Exjade’s side effects,” says the paper.

In addition to marketing the drug for chronic iron overload, Novartis also sold Exjade as a treatment for patients with a variety of underlying conditions that affect blood cells or bone marrow, including sickle cell disease, says the Idaho Office of the Attorney General.

While all of this might bring a collective yawn from the executive suites in Basel—after all, what’s $400 million dollars to a corporation who did $60 billion in sales in 2013—it’s well to remember that these obfuscations and manipulations actually hurt real, living human beings. In the lawyers’ offices and on the stock market floors, that is all too often forgotten.