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Novartis
AG
General manager
Vas Narasimhan
spent part of his 18 months at the helm of the drug giant to solve the problems that arose before him. He is now facing a storm.
Dr. Narasimhan said in a telephone conversation with analysts earlier this month that the company had concealed a data manipulation problem while the Food and Drug Administration completed its review of Novartis' drug Zolgensma, the more expensive in the world. The Swiss company said it wanted to complete its own review before alerting the FDA, which it finally did.
The timetable, however, has now been meticulously scrutinized by the regulator and angered by some prominent politicians, casting a shadow over Mr Narasimhan's mandate as Director-General.
"He certainly risks losing his credibility," he said
Brad Loncar,
an investor who manages an exchange-traded fund of biotechnology companies. "They handled the situation in the worst possible way." Mr. Loncar does not own any shares in Novartis.
The FDA has referred the Zolgensma case to its criminal investigation bureau so that it opens a preliminary investigation, according to a person familiar with the events. Submitting false data to the agency in the context of a new drug application could be a crime if the investigators prove that the actions are intentional and not an oversight.
Photo:
/ Associated press
Novartis stated that it had not been informed of the referral. The FDA declined to comment.
"The submission of complete information to the FDA is sacrosanct for the agency," said
David Gortler,
a former FDA official.
The manipulation took place at AveXis, a separate company that developed the drug and that Novartis bought later. Dr. Narasimhan stated that the delay in informing the FDA of the issue was not related to Zolgensma's approval schedule. Novartis said that those responsible for the manipulation had been ousted.
"We tried to do everything right," said Dr. Narasimhan at the analyst's call. He declined to comment on this article.
The episode is particularly stressful for Dr. Narasimhan because he has set himself the goal of restoring confidence in society. One of his first tests as CEO was the revelation that Novartis had paid $ 1.2 million to
Michael Cohen,
Former personal advocate of President Trump, for what the company called an overview of the administration's health policy. He called the decision – which was taken before becoming CEO and in which he says he was not involved – a mistake.
He is also chairing negotiations with the United States to settle a long-standing dispute that Novartis has treated doctors for sumptuous dinners and other events in exchange for increased prescriptions. The company recently set aside $ 700 million for a settlement.
Dr. Narasimhan, a 42-year-old Harvard physician, made a splash at Novartis after holding the high-level position. He promised to revive the research and development of society through technology and quickly decided to separate from lower growth companies.
Stocks reached their highest level in July since 2015, although they have declined somewhat since then. After the FDA revealed the data manipulation problem earlier this month, stocks fell 2.5%.
More about Novartis Gene Therapy
Dr. Narasimhan is deeply invested in the success of Zolgensma, which is one of the pillars of his strategy to turn society into leading-edge medicines. The $ 8.7 billion acquisition of AveXis, which developed Zolgensma and where the manipulation took place, was one of its first big bets as CEO.
The drug is one of the first gene therapies put on the market in the United States, but it also drew attention to its price – $ 2.1 million for single therapy. It treats spinal muscular atrophy in young children by providing a functional version of the defective gene that is causing the disease.
According to Novartis' report on data manipulation, the issue was raised for the first time internally in March. Dr. Narasimhan learned of the existence of the problem in early May, he told analysts during the call.
These data, although modest, were part of the FDA submission to get the drug approved. Dr. Narasimhan said that he had decided to conduct an internal investigation to determine if the FDA file required an update.
A few weeks later, on June 28, Novartis informed the FDA, which then approved the treatment. The agency said the treatment could remain on the market since the issue does not change its opinion that Zolgensma is safe and effective.
The disclosure sparked a firestorm in Washington, at a time when drug prices became a hot political issue. Five senators, including Democratic presidential candidates Sens.
Elizabeth Warren
from Massachusetts and
Bernie Sanders
of Vermont, recently wrote a letter to the FDA, urging it to react energetically to Novartis.
Separately, Sen.
Chuck Grassley
(R., Iowa) wrote to Dr. Narasimhan to ask him for information about the decision-making process and to qualify the episode of wrongdoing.
FDA officials are expected to meet with congressional staff to discuss the issue in the coming weeks, according to an agency official.
Write to Denise Roland at [email protected] and Tom Burton at [email protected]
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