Novartis CEO says 'legacy' bribery allegations provisioned for

By John Miller

ZURICH (Reuters) - Novartis (NOVN.S) Chief Executive Joe Jimenez said on Thursday bribery allegations against the drugmaker were legacy issues and it had set aside enough money to cover any penalties.

Novartis is fighting a widening lawsuit by U.S. prosecutors who allege its sales force ran a decade-long doctor kickback scheme involving sham events that led to overcharging the federal government. (http://reut.rs/1VHLpYz)

The drugmaker has disputed the allegations, which were filed in 2013, but now faces an investigation in Turkey after an anonymous whistleblower alleged it paid bribes there through a consulting firm to secure business advantages worth an estimated $85 million (59.28 million pound).

Novartis last year paid $390 million to settle U.S. allegations that it used kickbacks to speciality pharmacies to inappropriately push sales of its drugs.

In a call with reporters after its first-quarter results, Jimenez said that most of these "legacy issues" stem from the early 2000s, with some as late as 2012 and 2013.

"We have over 25,000 field sales representatives around the world, we train them very hard on compliance," Jimenez said.

"Whenever we see any activity of bad behaviour, we swoop in and then we get rid of that behaviour -- one way or another."

In August 2014, Jimenez hired a chief ethics and compliance officer, Eric Cornut, to root out any bad behaviour.

In its 2015 annual report Novartis listed 1,299 reported misconduct cases that year, 755 of which were substantiated. From these, 343 workers were dismissed or resigned.

That compares to 1,547 reported cases of misconduct in 2014, with 1,131 substantiated.

Jimenez, who joined Novartis in 2007 and was named CEO in 2010, said Novartis had set aside enough money to cover its legal obligations should it face penalties. "In terms of provisions, we are absolutely adequately provided for," he said.

As of the end of 2015 the company had set aside nearly $1.2 billion for product liability, governmental investigations and other legal matters, compared to $849 million in the year earlier, according to its annual report.

(Reporting by John Miller; Editing by Alexander Smith)