TOKYO -- The Ministry of Health, Labor and Welfare is poised to create a system to seize a portion of profits pharmaceutical companies gain via fraudulent sales methods, such as false or exaggerated marketing claims.
The basic plan was approved at a meeting of a subcommittee of the Health Sciences Council, an advisory panel to the ministry, on Nov. 22.
If any illegal practice involving the sale of the medical product that was the source of the large income was confirmed, the new system would greatly increase the amount of fines a company would already have to pay under the current system. This is hoped to prevent companies from engaging in the practices again. These changes are expected to be added to proposed revisions to the Pharmaceuticals and Medical Devices Act to be submitted to the ordinary session of the Diet next year.
Monetary charges leveled on companies are one type of administrative disciplinary measure. For improper labeling on non-medical products, revisions to the Act against Unjustifiable Premiums and Misleading Representations that went into effect in April 2016 stipulate that 3 percent of the sales of the product be collected by the government.
However, the medications prescribed by physicians fall out of the application of this law. Even if a hit item raked in several hundred billion yen to over a trillion yen in sales, the companies selling the misleading products could only be fined a maximum of 2 million yen, and the sale of uncertified medications only carried a fine of no more than 100 million yen.
The Health Ministry has been considering beefing up the punishment system following a data fabrication scandal concerning major pharmaceutical firm Novartis Pharma's high blood pressure medication "Valsartan," sold under the name Diovan. The company used documents listing altered clinical trial results as materials to sell the drug to doctors.
While Valsartan brought in a staggering total of 1.4 trillion yen in sales, it could only be fined a maximum of 2 million yen under the laws of the time for false or exaggerated advertising. In addition, the Tokyo High Court handed down an innocent judgment on Nov. 19 to both Novartis Pharma, the Japanse unit of Novartis International AG, and a former employee indicted on charges of violating the precursor to the Pharmaceuticals and Medical Devices Act. While the court did not deny that the documents had been doctored, it was decided that "academic papers are not advertisements," making the application of criminal punishment extremely difficult.
In 2015, Takeda Pharmaceutical Co. also received a warning from the Health Ministry over exaggerated advertising of a different blood pressure-lowering medication. Seeing the two incidents as part of a wider-ranging issue, many Diet lawmakers called for some framework to return the funds gathered through false practices. In the Tokyo High Court case decisions as well, "some manner of restrictions" were requested in an unusual statement calling for the development of new legislation or legal revisions.
Thus, the Health Ministry decided to advance adding similar administrative punishments to the Pharmaceuticals and Medical Devices Act as are listed for non-medical products in the Act against Unjustifiable Premiums and Misleading Representations. The ministry will use the latter law's 3 percent collection figure as a basis in future consideration of the amount of fines to level on the medical firms.
The government is also looking to the system in place in the United States, where major pharmaceutical company GlaxoSmithKline was fined $3 billion, or roughly 300 billion yen, for illegal advertisements for an antidepressant and other actions. As well as the U.S., the EU also levels fines and sanctions on the profits of companies made by fraudulent practices according to the amount of money made, and even in Japan, there is such a system for non-medical products.
While Jugo Hanai, 56, the head of a nationwide association supporting victims of drug-induced diseases, said that the charges will act as a deterrent against such fraudulent actions, an individual related to the pharmaceutical industry expressed discomfort: "What kind of measure is it if it only targets the pharmaceutical industry?"
(Japanese original by Ryosuke Abe and Go Kumagai, Medical Welfare News Department)