Novartis sales team involved in bribing stockists for over a year

MUMBAI: Stockists of Novartis in the country’s most important regional market warned the company last year of unhealthy practices in the distribution of Galvus, a drug at the centre of a fraud committed by some salesmen in the Swiss pharma giant.

The Pharma Wholesalers Association, (PWA), of the Mumbai region (which also includes Pune)

asked Novartis to check certain practises such as massive discounts and freebies to distributors to sell stocks of Galvus. ET has a copy of the letter.

“We solicit this requirement to comprehend and discourage any type of unhealthy distribution practise prevailing in pharmaceutical supply chain.” said the PWA letter of the addressed to the distribution manager of Novartis India in June 2012. Stockists told ET that Novartis sales representatives were offering 20% discount to select dealers for the purchase of Galvus.

Last week, Novartis sacked about 18 people for allegedly padding invoices and inflating sales of the drug.

Respondng to an ET query, Novartis said that there is no correlation between last week’s sacking and the stockists’ letter. “Let us first clarify that these are two independent issues with no correlation. The letter you refer to was related to stockists in Pune and Mumbai was investigated and resolved together with the trade,” said Ranjit Shahani, MD Novartis India. He further added that regarding the sacking which happened last week the company requires all employees to follow the Novartis Code of Conduct which sets out principles of ethical behaviour, professionalism and good business practice. “Novartis is committed to high standards of ethical business conduct and regulatory compliance in all aspects of its work. Any deviation from this Code is not tolerated at any level and any non-compliant behaviour is treated with immediate decisive action,” Shahani added. Novartis added that it is investigating about its sales executives fabricating data for which they were sacked.

Stockists in the westen region had complained that the sales reps of Novartis had been offering massive dicounts of the drug in order to push sales. They were also givng away the drug for free on some ccasions. The association had asked the Swiss drug maker to furnish the purchase details of all the stockists of Novartis since January 2012.




Galvus is a leading anti-diabetes drugs in the country with an annual sales of Rs 200 crore. The anti diabetic market drug market in India is one of the fastest growing therapeutic areas with an annual growth of over 20% this market is estimated to be Rs 3000 crore.

A spate of malpractices within the pharma industry in recen months has caught regulators unawares and created unease among consumers. Ranbaxy, once upon a time a poster boy for the Indian pharma industry, recently reached a $500 mln settlement with the US government for supplying wrong information to the US Food and Drugs Authority (FDA) and supplying adulterated drugs. Novartis, the second largest drug maker in the world, was sued by the US government in April this year for paying bribes to doctors to increase sale of its hyper tension and diabetes drugs.