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February 27, 2015

UPDATE: Novartis Faces 15-Day Suspension in Japan

  • Novartis has been ordered by Japanese health officials to suspend its operations in the country for 15 days, as punishment for failing to report the side effects of more than two dozen of its drugs.

    Japan’s Ministry of Health, Labor and Welfare (MHLW) issued a business suspension order halting from March 5 to 19 the manufacturing and sale of non-over-the-counter drugs marketed by Tokyo-based Novartis Pharma KK (NPKK).

    In a statement emailed to GEN, Novartis confirmed the business suspension order.

    "The MHLW has not requested NPKK to revise product inserts or implement safety measures in relation to the delayed reporting of these adverse reactions,” Novartis stated.

    “Novartis take this matter very seriously and we have been strengthening and expanding companywide measures to ensure that such incidences do not recur. NPKK will take all necessary steps to ensure that patients in Japan are not adversely affected by the business suspension,” the statement also said.

    Novartis was cited by the health ministry after admitting in December 2014, following an internal investigation, that it had failed to report in a timely manner a total of 3,264 cases of patient health problems possibly caused by side effects of 26 drugs sold by the company. The ministry requires drug developers to report side effects within 15 or 30 days, depending on their seriousness, under the Law on Pharmaceutical and Medical Devices.

    Novartis is believed to be the first pharmaceutical company in Japan to receive a suspension order.

    The order marks the second action taken against Novartis by Japanese authorities in less than a year. In July 2014, the health ministry issued the company a business improvement order for failing to provide timely notification of side effects associated with leukemia drugs Glivec and Tasigna drugs. The company was aware of 21 cases of serious side effects suffered by 16 patients, The Japan Times reported at the time, citing “the ministry and other sources.”

    Also last year, Novartis Pharma KK and a former employee were charged with causing a research team in 2011 to release clinical trial data that was manipulated to favor the blood pressure treatment Diovan. Japanese authorities raided the Tokyo offices of Novartis’ Japanese subsidiary as part of their investigation into the Diovan data.

    “Based on our assessment of the details of the Order, we do not expect a material impact on our financial performance,” Novartis added in the statement.

    Novartis has said it expects 2015 net sales to show “mid-single digit” growth at constant currencies, with core operating income projected to rise ahead of sales “at a high single-digit rate,” also at constant currencies. The company’s projections assume its deals with GlaxoSmithKline (GSK) will close on March 31 of this year.

    Last year, Novartis agreed to acquire oncology assets from GSK for up to $16 billion; sell most of its vaccine business to GSK for up to $7.1 billion; and sell to GSK a 63.5% majority stake in its consumer healthcare business, creating a joint venture. The Novartis-GSK transactions were among a series of deals totaling $28.5 billion announced last year, through which Novartis CEO Joseph Jimenez aims to restructure the company by focusing more on perceived strengths.

    [This report has been updated from an earlier edition to include Novartis' statement on the suspension and the company's financial outlook for 2015.]

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