Swiss pharmaceutical giant Novartis recently ran into legal trouble over collusion in Italy, but the company’s problems in its second-largest market could be even greater after Japanese authorities arrested a former employee on June 11.

Japanese prosecutors allege that Nobuo Shirahashi falsified research data while working for Novartis in 2010 and 2011, altering data connected to the blood pressure drug Diovan. Before his arrest, Shirahashi denied the charges to Japan’s national broadcaster, NHK.

In addition to the drug Diovan, Novartis also found that company staff hid side effects experienced in a trial for a new leukemia treatment. According to The Wall Street Journal(WSJ), some staff went as far as to shred documents and delete online files in order to hide evidence.

As a result, Novartis has invited a host of regulatory pressure from Japanese authorities. In January 2014, Japanese health regulators filed a criminal complaint against the company, invoking a clause in Japanese pharmaceutical law that bans false or misleading advertising. Japanese regulators say that Novartis’s falsified research led directly to this criminal act. Prosecutors also raided Novartis’s Tokyo office in February 2014, looking for evidence of wrongdoings.

Misleading consumers is also the charge against Shirahashi. If found guilty, the ex-Novartis employee could face ¥2 million ($19,541) in fines or a prison sentence of up to two years.

Novartis claims that the advertised benefits of Diovan are not falsified, and the company cites clinical trials occurring outside of Japan as the basis of the drug’s health effects. Eric Althoff, a spokesman at the company’s Switzerland headquarters, told the WSJ that the company’s internal investigation did not find “any evidence of willful manipulation or falsification of data” in the Japanese studies. Concerning future legal action against the company, Althoff simply said that the company is cooperating and cannot comment further.


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