Biovail Targeted by U.S. Grand Jury on Sales Tactics
Biovail Corp., the largest publicly
traded drugmaker in Canada, said its the target of a grand jury
investigating how the company started selling the blood-pressure
drug Cardizem LA five years ago.
The U.S. Attorneys Office in Boston is probing the 2003
sales and marketing program in which Biovail introduced the drug
to patients through some doctors, the Mississauga, Ontario-based
company said in a statement today. Criminal or civil charges
could be filed, the company said.
The federal investigation was first disclosed in 2003 as an
administrative inquiry. Barrons reported that year that doctors
were wary about Biovails plan to offer them $1,000 to write 15
prescriptions for Cardizem LA, then complete a report on each
patient. Biovail has defended its promotion of the drug and said
it continues to cooperate with federal officials.
“The fact that its been percolating now for almost five
years and finally that the attorney general has decided to move
forward on this does come as a surprise, David Lickrish, an
analyst at Broadpoint Capital Inc. in New York, said today in a
phone interview. “Its difficult for us to ascertain what it is
that they saw that warranted this action.
Lickrish doesnt expect any significant financial impact to
Biovail if charges are eventually filed against the company. He
rates Biovail “neutral and doesnt own the shares.
Biovail fell 46 cents, or 3.4 percent, the most in two
months, to $13.24 at 4:00 p.m. in New York Stock Exchange
composite trading. The company has lost 37 percent in the past
12 months.
The drugmaker “has been invited to provide evidence and
arguments bearing on the matter to the U.S. Attorneys Office
and intends to do so as soon as practicable, the companys
statement said. The company wont comment further, the statement
said.
“We never confirm or deny grand jury investigations,
said Christina DiIorio-Sterling, a spokeswoman for U.S. Attorney
Michael J. Sullivan in Boston.
Cardizem LA, a long-acting medicine to ease chest pain and
control high blood pressure, generated $14.4 million in revenue
for Biovail in the third quarter, or about 7 percent of the
companys sales. The company gets paid to make the drug for Kos
Pharmaceuticals Inc., now a unit of Abbott Laboratories, which
bought rights to U.S. sales from Biovail in 2005.
