Astra Zeneca Scandal: CEO Vows Action

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For the first time since the ‘newsletter affair’ emerged, the drugmaker’s ceo, Dave Brennan is addressing the issue. And not surprisingly, he tells a UK newspaper that he promises to discipline more of the US sales team if allegations of off-label marketing of cancer meds turn out to be true.

“There was an issue and we took action; if there is another issue, we will take more action. We have in place a very thorough and well-understood compliance program in the US and across the entire business, with codes of conduct and operating principles and annual training, and I take all that very seriously. As for any particular situation at any particular point of time, I would say that the management responded by doing what they thought they ought to do.”

He made his remarks after internal sales training tapes surfaced on several blogs over the weekend, showing how sales reps are encouraged to sell against a rival Novartis drug for which there are no head-to-head comparisons.

For those who haven’t followed this mess, the saga busted into the open earlier this month when an internal newsletter was posted on several blogs and quoted a regional sales manager likening a doc’s office to a ‘big bucket of money‘ and discussing a rival cancer med. The manager, Mike Zubillaga, was quickly fired.

Then, several anonymous AstraZeneca employees, who dubbed themselves the Gang of Seven, leaked to the blogs a few memos allegedly containing surreptitious maneuvers for selling the company’s Arimidex cancer drug. In response, AstraZeneca claims to have begun an internal investigation.

The drugmaker is already operating under a Corporate Integrity Agreement since 2003. Meanwhile, though, the HHS Office of Inspector General is keenly aware of the affair, although won’t confirm whether a new investigation is under way or not. And at least one congressman, Pete Stark, who chairs the House Ways and Means health subcommittee, wants to learn more.

David Brennan cautioned against pre-empting investigations into the affair, particularly since the source of the allegations was anonymous website tip-offs. He said that misbehaviour within parts of a drug company’s sales organisation was rare and “relatively unpredictable”, and the important question is a how company handles it.

One drug-industry analyst, Mike Ward at Nomura Code, tells the Independent that investors should keep an eye on the unfolding allegations. “These things usually result in just a slap on the wrist, but, if Novartis wanted to make a song and dance about it, then AstraZeneca could find itself in trouble.”

Full story in The Independent.[tags]Arimidex, AstraZeneca, Dave Brennan, Mike Zubillaga[/tags]

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