Swiss drug maker Novartis investigates $85mn bribe allegation in Turkey

By bne IntelliNews March 31, 2016

According to a February 17 e-mail seen by Reuters, an anonymous whistleblower has accused Swiss drug maker Novartis of paying bribes in Turkey through Turkish consulting firm Alp Aydin Consultancy to secure business advantages worth an estimated $85mn, Reuters reported on March 30.

The anonymous whistleblower sent an e-mail on February 17 to Novartis CEO Joe Jimenez and Srikant Datar, chairman of its audit and compliance committee, in which they claimed that Alp Aydin Consultancy had paid the equivalent of $290,000 plus costs during 2013 and 2014, before the Turkish Social Security Institution (SGK) launched an investigation. Alp Aydin Consultancy allegedly passed the funds on to Turkish healthcare officials. Novartis ended its business relations with Alp Aydin Consultancy after SGK launched the investigation.

The whistleblower resent the e-mail  on March 4 after failing to receive a reply and Jimenez replied on March 4 that they would investigate, according to Reuters.

The anonymous e-mail said that Novartis had gained $20mn from Alp Aydin Consultancy’s ability to have new drugs for multiple sclerosis, chronic lung disease and juvenile arthritis added to hospital formularies while another $50mn came from Turkish officials allowing Novartis to rename its drugs Ilaris and Gilenya as Ibecta and Fingya.

Novartis said that it was currently investigating the allegations.

According to healthcare consultancy IMS, Turkey is currently the world’s 18th largest pharmaceuticals market and is expected to become 15th largest market by 2020, Reuters reported.

Turkey fell two spots to 66th place among 168 nations on Transparency International’s 2015 Corruption Perception Index.

The Turkish authorities failed to properly investigate corruption allegations in 2013 that targeted President Recep Tayyip Erdogan’s inner circle, leading to the resignations of four ministers of the Justice and Development Party (AKP) government. Erdogan dismissed the corruption investigations as a coup attempt to topple him and an international plot against Turkey.

However, the US arrest of Iranian-born Turkish businessman Reza Zarrab on March 19 threatens to reopen the 2013 corruption investigation and that could tarnish Erdogan's reputation. However, Erdogan recently said the arrest of Zarrab had nothing to do with Turkey.

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