Four former Novartis executives were recently cleared of bribery charges after a seven-year investigation into allegations that doctors and public officials accepted kickbacks from the company from 2006 to 2015.
Konstantinos Frouzis, the former vice president of Novartis Greece, along with three other executives from Novartis’ parent company, and Nikos Maniadakis, a former Health Ministry advisor, were all acquitted of the charges and no evidence was found showing that they were involved with the ten politicians who were investigated for passive bribery. The five were also cleared of bribery of non-political individuals, based on the expiration of the statute of limitations.
While the Novartis executives and Maniadakis were cleared of wrongdoing, the economic prosecutor in Greece did press charges against fifteen doctors for their alleged involvement in the scheme. The prosecutor found that the doctors received financial benefits in exchange for prescribing Novartis medications. The investigation remains ongoing and other healthcare professionals are still under investigation.
United States Settlement
The findings from Greece follow a June 2020 criminal penalty and deferred prosecution agreement with the United States Department of Justice (DOJ) and Novartis Hellas S.A.C.I. – the Greece-based unit of Novartis AG. In that arrangement, Novartis Hellas agreed to pay a $225 million criminal penalty for bribing doctors, hospitals, and clinics to prescribe the company’s drugs.
Specifically, the United States alleged that Novartis Hellas conspired from 2012 to 2015 to bribe state-owned hospital and clinic employees in Greece to buy more Novartis-branded drugs. Novartis Hellas would pay for public and private ophthalmologists in Greece to attend international medical congresses organized by various medical associations in the United States and Europe. Novartis Hellas paid for not only the costs associated with attendance at the actual event, but also airfare and hotel accommodations. The total cost for attendance of an international congress often exceeded $6,000 for individual Greek State health care provider.
The United States also alleged that Novartis Hellas “maintained internal documentation” that noted which healthcare providers had the highest propensity to prescribe its medications and who would therefore be eligible for an “investment,” such as sponsorships to attend the international congresses. Healthcare providers with lower potential and propensity to prescribe would not receive those “investments.”
Through the deferred prosecution agreement, Novartis Hellas admitted responsibility under United States law for the actions of its officers, directors, employees, and agents as outlined in the Information.