Narasimhan called the contract a major mistake at a meeting with investors in Basel and said Novartis is developing a principles, not a rules-based, system to avert corruption.
“There will always be a way around the rule, whereas if you ask the question, ‘Is this the right thing to do, are you comfortable with this being on the front page of the newspaper?’… that’s going to help get us to a better place.”
Since 2015, Novartis has paid out hundreds of millions in settlements and fines as a result of kickback allegations in South Korea, the United States, and China and faces an investigation of alleged bribery in Greece. A trial for another U.S. kickbacks case is scheduled for 2019.
Novartis shareholders have urged Narasimhan to exert more “moral influence” over perceived ethical shortcomings that Jimenez in 2016 blamed on a “results-oriented” sales culture and some bad actors.
Klinger cited changes to bonus schemes for Novartis’s drug sales force that are meant to avoid the potential for corruption.
“Anyone sales rep can have no more than 40 percent (bonus), so we think that by doing this we have also embedded our values and behaviors for our sales reps,” she said.