WSJ
TOKYO—Swiss drug giant Novartis AG replaced its top management and put a freeze on its clinical tests in Japan on Thursday as it looks to restore its reputation after a string of questionable practices came to light about its clinical trials here.
Following a third-party probe into Novartis's Japan unit that showed staff hid severe side effects experienced by some patients in a trial for a leukemia treatment, Yoshiyasu Ninomiya resigned as head of local unit Novartis Pharma K.K., the company said. He will be replaced by Dirk Kosche, the head of emerging growth markets for Novartis Oncology.
The company also replaced Hiroko Ishikawa, the president of Novartis Holding Japan, with Novartis Pharma adviser Michael Ferris, and fired a number of local staff involved in the trials.
Related Coverage
Japanese Panel Finds Novartis Staff Covered Up Evidence (April 2, 2014)
Prosecutors Raid Novartis Office in Tokyo (Feb. 19, 2014)
Japan Criminal Probe Could Spell More Trouble for Novartis (Jan. 9, 2014)
Novartis has placed a moratorium on all clinical trials in Japan while it conducts a further investigation, Novartis Pharma's pharmaceuticals head David Epstein told reporters during a news conference.
The move, as well as the management change, will likely hurt the company's revenues in Japan over the short-term, he noted. Japan is one of Novartis's largest markets.
"Our company culture and the way we do business in Japan needs to change urgently," Mr. Epstein said, after apologizing for the improper ties between Novartis's research and commercial operations.
He added that the company will continue to look for other questionable ties between its staff and doctors commissioned to conduct clinical trials.
"We fully expect to find other clinical trials that are problematic," he said.
The third-party report found that Novartis sales staff collected responses by patients participating in the trials, violating protocol that personal data be faxed directly from each medical institution by the doctors. Some sales staff members also helped doctors write out the grades rating the severity of side effects of leukemia treatments.
Novartis is already subject to a criminal investigation in Japan after the health ministry filed a criminal complaint with Tokyo prosecutors against the company in January, alleging that it altered research results to promote its heart medicine Diovan.
Write to Mayumi Negishi at mayumi.negishi@wsj.com
