Novartis Uses “Dog Ate My Homework” Strategy with FDA; Will It Work?  
[Thursday, September 26, 2019]

This week Novartis blamed the “stonewalling” of its internal probe into data manipulation by two of its former employees for the delay in informing FDA of the same. Accusing ex-employees (or even current employees) is not a new tactic by a company at the center of a regulatory crisis but will it work for Novartis? A critical analysis of the announcement shows that this is an attempt to shield Novartis’ corporate officers. The carefully worded announcement did not even name Novartis but Avexis, the company that had been acquired and was completely owned by Novartis at the time of the event, as the responsible party. The announcement further stated that Novartis will “fully-absorb” Avexis, hinting that Avexis was acting as an independent entity at the time of the event. The two senior officials blamed for the mishap could be presented as corporate officers of Avexis and hence held responsible under the Park doctrine, as described below. But this is not true; Avexis was a part of Novartis at the time of the event; Novartis fully owned the company and benefited directly from the FDA approval decision. The senior executives at Avexis were Novartis employees for all intents and purposes. The announcement mentions that the senior executives responsible for data manipulation were effectively fired immediately upon Novartis becoming aware of the data manipulation further indicating Novartis’ complete control of Avexis. The company claims that despite the firings, it still needed to complete the internal investigation that involved reviewing thousands of “handwritten and electronic documents” and took investigators more than “2000 hours”, conveniently moving the disclosure to FDA by three months, literally guaranteeing that the FDA would not know till after the decision on the market approval application has been made. There is a sinister reason for why Novartis would want to distance it corporate officers from any of the illegal actions of its Avexis entity. The corporate officers of regulated companies are responsible for any illegal actions of their employees under the “Park Doctrine”, also known as the “Responsible Corporate Officer” doctrine. Under the Park Doctrine, FDA can obtain convictions of a company official for alleged violations of the Food Drug and Cosmetics Act – even if the corporate official was unaware of the violation – if the official was in a position of authority to prevent or correct the violation and did not do so. By trying to pin the blame on former employees who led Avexis prior to being acquired by Novartis, the company is trying to distance its own corporate officials. It is undeniable that Novartis benefited from the delay disclosing the data manipulation to FDA immediately. Novartis was days away from a highly likely positive decision by FDA for the product and any new information, no matter how innocuous would have delayed FDA’s decision. And that’s what angered FDA. It is often said that more than the crime, it is the coverup that damages reputations, as it did here. So far, Novartis has avoided apologizing for the event and now it is trying to distance itself. Now we wait to see if FDA buys it and absolves Novartis of any wrongdoing.