Italy's managing director at Novartis Vaccines and Diagnostics Francesco Gulli has been put under investigation for alleged fraud against the Italian state, local reports said on Friday.
Police were searching the two Italian seats of Swiss pharmaceuticals multinational Novartis in Siena, in central Italy, and Origgio, in northern Italy, in a probe into suspected fraud in the provision of flu vaccine in 2009, the national newspaper Corriere della Sera said.
Investigators suspected the pharmaceutical company of defrauding the health ministry of at least 2.7 million euros (3.7 million U.S. dollars) in supplying the vaccine against the A/H1N1 flu virus, also known as the swine flu, a respiratory illness found in pigs which caused a world-wide pandemic in 2009.
According to investigators, Novartis in 2009 sold the vaccine to Italy's national health service deliberately pushing up production costs through an overbilling system and inflating compensation prices by 500 percent when the supply was stopped a year later.
The alleged fraud however may account for a total of as much as more than 16 million euros (21.7 million U.S. dollars), according to police sources quoted by Corriere della Sera.
Friday's investigation was related to another ongoing probe into Swiss pharmaceutical companies Novartis and Roche for their alleged collusion to hamper use of a cheap eye drug in favor of a more expensive one.
The suspected operation promoting Novartis's Lucentis over Roche's Avastin was believed by investigators to have cost the Italian state more than 45 million euros (61 million U.S. dollars) in 2012 alone.
Following Friday's allegations, Novartis said in a statement that its "work has always been marked by the full respect of the law" and that the company was ready to "fully cooperate with the competent authorities."