Novartis has agreed in principle to pay $390 million to settle USA allegations that it used kickbacks to speciality pharmacies to push sales of a few drugs, the Swiss company said on Tuesday, hitting third-quarter earnings. Novartis has rejected accusations it bribed pharmacists to favour sales of two of its drugs.
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Novartis AG Chief Executive Officer Joe Jimenez said last week’s deal with Admune Therapeutics LLC, created to give it access to targeted cancer therapies, may serve as a model for future acquisitions to strengthen its eye- care unit Alcon and boost the pipeline of Sandoz, its generics arm.
Core net income fell 2 per cent to US$3.06 billion, the world’s biggest seller of prescription drugs reported, compared to the average analyst estimate of US$3.128 billion in a Reuters poll. Net sales fell 6% to $12.27 billion.
The company says it’s not admitting wrongdoing as part of the settlement, and, in fact, continues to use a few similar tactics-at least for now-because they’re created to keep patients on their medication regimens.
Over the first nine months of the year, sales were down 6 per cent to $US36.89 billion and net earnings plunged 20 per cent to $US5.97 billion. Novartis shares fell 2 percent to 88.60 Swiss francs by 08:00 GMT.
“You are going to see more of those, to strengthen the pipeline on all three divisions”, Jimenez said.
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Past year the company, which makes the high blood pressure treatment Diovan, posted operating income of $10.7 billion on net sales of $58 billion.
