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Novartis says Japanese health ministry to suspend unit
[ZURICH] Swiss drugmaker Novartis said on Tuesday its Japanese business faced suspension by the country's health ministry but that it could manage the financial impact of such a sanction.
The pharmaceutical firm replaced top management in Japan last year after being accused of manipulating data over its blood pressure drug Diovan and facing questions over its handling of clinical trial results for a leukaemia treatment. "We can confirm that Novartis Pharma K.K. has received a pre-notification from the Ministry of Health, Labor and Welfare (MHLW). We cannot give any further information at this time,"Basel-based Novartis said in a statement on Tuesday.
Japan is an important market for Novartis, accounting for roughly seven percent of its US$58 billion in total sales last year, and around a quarter of Diovan's global sales before the scandal.
However, investors reacted calmly to the news, with Novartis shares trading slightly firmer on Tuesday morning, Japanese news agency Kyodo had cited sources as saying the health ministry would order a suspension of around 15 days for the Japanese unit. It said the ministry would finalise the order after giving the company an opportunity to explain itself. "While we would need to evaluate the details of any proposed business suspension Order from the MHLW, we believe that the financial impact will be manageable," the drugmaker said.