Russian police search Novartis, Teva offices: report (Reuters)

MOSCOW (Reuters) – Russian police searched the offices of four pharmaceutical companies in Moscow on Tuesday, including Swiss drug maker Novartis AG and Israel-based Teva, the business daily Vedomosti reported, quoting a police source.

Vedomosti, in a report on its website, quoted the source as saying the searches were part of an investigation into an alleged carve-up of the market for supplying the state healthcare system with essential drugs.

The government runs a system of subsidized purchases of drugs for low-income citizens. An investigation into the system showed the bulk of state supply contracts worth over $2 billion went to six distribution firms in 2006-08.

A Novartis spokeswoman in Moscow confirmed the search took place and said the company was cooperating with the police. She declined to explain the substance of the investigation.

Teva's spokesman in Israel confirmed police were in the company's Moscow office but said the visit concerned a "matter not related to Teva," adding that "it was only for the purpose of providing testimony."

An industry source said police have been investigating suspicions over a former distributor for several drug firms, including Teva, regarding its pricing policy.

"The police came to Teva's office to examine the possibility that Teva employees who worked with the distributor would testify," the source said.

The two other firms are Russian drugmakers Valenta and Akrikhin, Vedomosti said, quoting the source.

A source close to Akrikhin confirmed the search took place, while Valenta was not available for comment.

Novartis plans to invest $500 million in Russia over the next five years and build a plant in St. Petersburg to strengthen its position in the market, which is expected to exceed $60 billion by 2020.

Teva, the world's largest generic drugmaker, plans to invest up to $100 million in a drug production plant in Russia as it aims to more than triple Russian sales by 2015.

Russian Prime Minister Vladimir Putin has warned international pharmaceutical companies and medical equipment makers that they will face restrictions in Russia if they fail to develop local production and transfer technology.

International pharmaceutical firms currently control about 80 percent of the Russian drugs market. Putin said the situation was threatening Russia's national security.

International drugmakers see Russia as a fast-growing emerging market to offset slowing sales in Western markets.

Surgeons in Medtronic trials omitted results: report (Reuters)

NEW YORK (Reuters) – Surgeons conducting clinical trials to test a Medtronic Inc bone-growth protein used in spine surgery, some of whom got at least $62 million from the company, failed to report serious complications in their research papers, the Wall Street Journal reported.

Fifteen of the surgeons got at least $62 million from the company over the past decade, the paper said, citing an analysis of Medtronic documents and disclosures on the company's website.

A new study in the Spine Journal said serious complications including cancer, sterility, infections, bone dissolution and worsened back and leg pain, occurred in 10 to 50 percent of patients who were administered Infuse or a sister product in 13 clinical trials funded by Medtronic and conducted by the surgeons between 2000 and 2010, the Wall Street Journal said.

These complications weren't reported in research papers the surgeons wrote on those trials, even though the papers were peer-reviewed, the study said.

A U.S. Senate committee is investigating whether surgeons who were paid consulting and other fees by Medtronic failed to note the complications of Infuse.

The company last week said the three main side effect concerns raised by the committee are listed as warnings on the product labels, as approved by the U.S. Food and Drug Administration.

In a statement, Omar Ishrak, Medtronic's chief executive, on Tuesday said the Spine Journal study does not raise questions about the data Medtronic submitted to the FDA in the approval process.

"Based on that data, we strongly believe that the safety profile reported to the FDA and summarized in the product label support the safe use of rhBMP-2 for the identified indications," he said. The company will continue to investigate questions surrounding researchers' potential conflicts of interest and refine policies as needed, he said.

A company spokesman declined additional comment.

(Reporting by Lynn Adler; Editing by Lisa Shumaker)