Archive for April, 2013

Accusations CSIRO puts dollars before distinctions

Posted on April 11, 2013. Filed under: Uncategorized |

Date
April 12, 2013
 Nicky Phillips and Linton Besser
Applauded:  CSIRO Australian Animal Health Laboratory scientists.Applauded: CSIRO Australian Animal Health Laboratory scientists. Photo: Supplied

Publish or perish.

It’s an ethos scientists live and die by, except some at the country’s peak scientific organisation.

A team of independent experts have found many of the CSIRO’s 12 once highly regarded divisions are failing to produce a sufficient amount of high-level research expected of a publicly funded science institute.

Under par:The work done by CSIRO Land and Water.Under par: The quality of work produced by CSIRO Land and Water and several other divisions.

They blamed the organisation’s slump in science quality on the intense pressure from management to meet external revenue targets.

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Scientists from one division were told the “the pendulum has swung too far towards a service provider mentality to the detriment of scientific excellence, creativity and discovery”.

Some research groups are required to source more than half of their income from external sources such as industry.

A group of experts who reviewed CSIRO’s Earth Science and Resource Engineering division in 2010 considered the level of scientific publications per researcher per year ”substantially below” what was required of a world-class team.

They found the group’s fundamental research was suffering, and in some groups “entirely absent”, because of a funding-driven focus on short-term industry projects. This environment frustrated staff and was having a deleterious effect on morale, they wrote.

CSIRO claims to sit among the 1 per cent of global science institutes in 14 out of 22 research fields.

But a review of CSIRO’s Molecular and Health Technologies division, now part of Materials Science and Engineering, in 2009 found some of the group’s scientific productivity also lower than expected for such an esteemed group, and rated the science they had conducted as ”tenable” and declining.

Within the world of scientific research, the peer-review publication process is the benchmark by which all scientists are measured.

A researchers’ life-saving discovery or game-changing invention means nothing until the details have passed the scrutiny of their peers and are published in an academic journal.

The reviews applauded the world-class science of some CSIRO teams, particularly the Australian Animal Health Laboratory in Geelong, the Australia Telescope National Facility, the CSIRO’s ICT centre and the highly regarded ocean modelling by the organisation’s marine and atmospheric researchers.

But the quality of work by groups within the divisions of Land and Water, Sustainable Ecosystems and Food Services/Human Nutrition, now Food and Nutritional Sciences, received harsh criticism.

”So, is the Food Services Australia/CSIRO Human Nutrition jack-of-all-trades but master-of-none?” asked the division’s review team.

The assessors of the Land and Water division said they were “hard pressed” to nominate any outstanding research outcomes from the division’s recent work.

The reviews of the Materials Science and Engineering and Minerals divisions noted the groups had improved their publication record but it was still below the level required of a revered science organisation.

The Minerals division review panel found the priority of meeting project deadlines and the impact of funding pressures meant preparing work for publication was often not given sufficient priority.

In response to the review’s criticism of science quality, the organisation’s general manager for science excellence and standing Jack Steele said the CSIRO was not a university and ran a ”mixed business”. Its goal was to deliver research that made an impact and responded to needs of government and other stakeholders, he said.

”We would love a higher publication rate per person, but it is not our primary deliverable.”

Despite the organisation’s heavy focus on applied research, Dr Steele said one of CSIRO’s own analysis reports had ranked it among the world’s best scientific institutions.

CSIRO’s Science Health Report, based on data collected by Thomson Reuters, placed the organisation in the top 1 per cent of global science organisations in 14 out of 22 research fields over the past year, and in the top 10 global institutions in the fields of plant and animal science, agricultural sciences and environment and ecology.

The ranking was based on the number of CSIRO published papers cited in the research of other scientists over the past 10 years.

CSIRO was the only Australian institution to feature in the top 10 of any field, and its total number of publications had risen each year for the past decade bar one year, Dr Steele said.

The external revenue target for each division was set based on the market or commercial value of its research, he said.

He said it was typical of external panels to question the balance between fundamental research and industry-focused contract work.

Do you know more? investigations@smh.com.au

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Novartis, minister launch inquiries

Posted on April 11, 2013. Filed under: Uncategorized |

Date
April 12, 2013

Linton Besser, Nicky Phillips

Internal Investigation: Novartis Pharmaceuticals.Internal investigation: Novartis Pharmaceuticals. Photo: Peter Rae

Global drug giant Novartis has begun an ”internal investigation” into a five-year deal it signed with a CSIRO spin-off company to buy an anti-counterfeit technology that the CSIRO and its partner knew could be compromised.

Novartis bought what it was told was a custom-designed invisible ”tracer” that would protect millions of ampoules of injectible Voltaren, widely sold overseas but not in Australia, from the threat of the booming black market trade in counterfeit medicines.

But a Herald investigation revealed on Thursday that DataTrace DNA Pty Ltd, a joint venture between the CSIRO and public company DataDot Technology Ltd, instead issued Novartis with widely available tracer material it had bought from China and which it was warned was insufficient for a pharmaceutical application.

Science Minister Don Farrell has demanded the CSIRO investigate the issue and report back to him, and opposition science spokeswoman Sophie Mirabella is calling for an independent inquiry into the CSIRO to address this ”very serious allegation”.

”There needs to be an independent investigation,” she said. ”Obviously something has gone very wrong.”

Alexandra Suvajac, a Novartis Australia spokeswoman, said the company had several measures to ensure the safe use of its drugs that were ”not compromised by the allegations around the use of this technology”.

”I can confirm we are undertaking an internal investigation of the matter,” she said.

”Novartis is aware of the story reported today and cannot comment further on the ongoing investigation.”

The CSIRO said it was ”making inquiries to establish the facts and test the veracity of the claims in so far as they relate to CSIRO”.

Shares in DataDot Technology have been put into a trading halt until Monday. Company secretary Graham Loughlin requested the halt as a result of Thursday’s press coverage of the allegations.

DataTrace was half-owned by CSIRO when it sold the anti-counterfeit technology to Novartis, which had sought a method to protect its injectible drugs, made in Egypt, Slovakia and Switzerland.

DataTrace had several times assured Novartis the tracer was made under secure conditions in a CSIRO laboratory in Melbourne.

In fact, the company issued it with phosphor-based tracer bought from a lighting supplier in China that was considered sufficient only for low-security applications, such as batch and stock control or sorting industrial commodities.

Do you know more?

investigations@smh.com.au

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Call for inquiry as CSIRO comes under the microscope

Posted on April 11, 2013. Filed under: Uncategorized |

Mr Roy is very good at not answering the questions posed to him.  A reduction of organisational units from 27 to 23 has little to do with the number of administrative and managerial staff which have exploded to almost half the organisation over the same period.

Date
April 12, 2013

Nicky Phillips, Linton Besser

EXCLUSIVE

Demanding answers: Science Minister Don Farrell.Call for answers: Science Minister Don Farrell. Photo: Supplied

Confidential reviews of the CSIRO by some of the world’s most accomplished scientists show that the once great institution is now unable to act in the best interests of advancing research.

They found the Commonwealth Scientific and Industrial Research Organisation was being strangled by a bureaucratic labyrinth stifling innovation and persuading science leaders to abandon the 87-year-old institution, the reviews say.

One of Australia’s most renowned scientists, who wished to remain anonymous, said the nation’s peak research body had lost its way and should ”remove the S from its name”.

Critical: Former division chief Max Whitten believes CSIRO  has lost worldwide credibility.Critical: Former division chief Max Whitten believes CSIRO has lost worldwide credibility. Photo: Supplied

On Thursday night Science Minister Don Farrell demanded answers from the CSIRO after the Herald reported that officials and others involved in a spin-off joint venture knowingly passed off cheap Chinese chemicals as their trade-secret formula.

In a deal believed to be worth $2.5 million, the venture sold the technology to the Swiss drug company Novartis, one of the biggest pharmaceutical makers.

It was part of its high-security anti-counterfeit technology to protect hundreds of millions of injectable Voltaren ampoules distributed overseas. Voltaren is an anti-inflammatory.

Former CSIRO CEO Dr Geoff Garrett: Introduced the controversial 'matrix' management system.Under scrutiny: Former CSIRO Chief Executive Dr Geoff Garrett. Photo: Jessica Shapiro

Novartis has confirmed it has begun an investigation into the affair and the federal opposition has called for an independent inquiry into the entire organisation. A dozen previously unreleased assessments reveal the organisation had become bogged down in bureaucracy, doubling the number of managers and putting excessive emphasis on basic paid consulting work at the cost of time and resources for real science.

Its focus on short-term projects was ”paralysing the ability of the groups to act creatively and strategically in the best interests of advancing the science”.

Former CSIRO staff, including division chief Max Whitten, said it was no longer recognised as a world-leading scientific institution, an accusation it vigorously disputes, citing a separate review by a former chief scientist in 2006.

One previously unpublished review, of the earth science and resource engineering division, reported consistently negative responses from all research groups it interviewed about the management model.

”The panel considers that this is … seriously undermining the quality of the research,” the review says. ”In our opinion, the costs significantly outweigh the putative advantages.” The sentiments were echoed in many other reviews, including the nutrition group which found its ”once world-leading laboratories have lost that position, and with a number of exceptions, are now followers of the best front-line centres”.

The reviews commend some areas for world-class research but repeatedly criticise the management structure, which it has dubbed the ”matrix”.

This matrix was incrementally introduced from 2003 by former chief executive Geoff Garrett, aimed at conducting more science targeted to specific problems facing industry, government and the community. Dr Garrett dismantled many of the 22 divisions. In their place he introduced entities called ”flagships”, which are more focused on generating revenue.

Critics say that while the goals of many flagships were worthy, it was inappropriate for the research of the country’s leading scientific organisation to be tied to financial benchmarks because it stifled scientific discovery.

Under the present structure, the 12 divisions host the organisation’s scientific capacity – its staff, infrastructure and expertise. But these resources are mainly used to service projects run not by the divisions but the flagships.

In the past, the CSIRO’s reputation for producing highly valuable and independent science was based on its divisions, led by internationally respected scientists. ”Now CSIRO doesn’t enjoy a good reputation in many areas,” said Dr Whitten.

The reviewers found the matrix fragmented researchers among multiple projects and answerable to several managers. Reviewers of the land and water division found the needs and priorities of the flagship dominated decisions about what science to undertake.

Despite the criticism of the inner workings, staff scientists have achieved successes in the past few years, including developing a hendra vaccine and securing Australia as a co-location for the world’s biggest radio telescope. The review’s complaints also contrasted sharply with a review of the flagship program conducted by the former Australian chief scientist Robin Batterham in 2006, which praised the matrix structure. The deputy chief executive, science strategy and people, Craig Roy, rejected suggestions the matrix had increased management, saying the organisation had reduced its 27 divisions and flagships in 2003 to 23 entities now.

”In 2002 the organisation wasn’t structured to focus on the big issues of low emissions energy, water, oceans, health, food. Those are the places where, in many cases, we’re leading the national R&D agenda today,” he said.

The organisation was also addressing criticism its divisional research was fragmented and researchers were too stretched. ”In the last six months we’ve been working … to address … [the issue] of fragmentation [to] make life easier for scientists so they can focus more on their science,” he said.

The general manager of science excellence and standing, Jack Steele, said only a ”sliver” of the CSIRO’s work was contract testing for industry. ”Almost all of our activity has a component of discovery associated with it.”

Do you know more?

investigations@smh.com.au

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Wong, Carr implicated in CSIRO scandal

Posted on April 11, 2013. Filed under: Uncategorized |

Victims of CSIRO and independently, a number of its members have attempted to engage with members of the government in relation to the problems with CSIRO for some time now.  To date we have yet to see the Finance Minister, Attorney-Generals (x 2) or Science Minister’s (x 4) take any interest in the complaints.

The typical response to our correspondence is either to palm the matter off suggesting that the agency is aware of its obligations and has appropriate policies in place with which to deal with such matters or through implication suggesting that the matters brought the attention have no basis in fact and are not supported by evidence.

We beg to differ!

Wong, Carr implicated in CSIRO scandal

11/04/13

Finance Minister Penny Wong and former Science Minister Kim Carr have serious questions to answer following revelations of more claims of corruption at the CSIRO.

In today’s Fairfax newspapers it has been reported that a Swiss manufacturer was deliberately deceived by CSIRO officials about the effectiveness of a technology designed to prevent the sale of counterfeit drugs.

The Coalition believes that Senator Wong has sat on an investigation of some these claims for two and a half years after being directly contacted in 2010 by Gerry Swiegers, the ex-CSIRO scientist at the centre of the case.

In November 2010, Senator Wong agreed with Dr Swiegers that his claims raised “complex issues regarding the operations of the CSIRO” and “there appear(ed) to be a need to investigate possible contraventions” of at least three sets of laws.

Senator Wong also provided copies of the correspondence to Senator Carr.

Senator Wong seemed unaware of the issue when directly asked in Senate Estimates in February 2013 about the progress of the investigation, and has subsequently still not made public any further information about the investigation.

She now has a duty to immediately detail the status of this investigation and explain why it has not been undertaken with urgency.

Although he has since been dumped from his position as Science Minister, Senator Carr also needs to explain what he did to investigate the major and mounting allegations of bullying, intimidation and criminality that are now rocking Australia’s best known scientific institution.

The Coalition renews its call for a comprehensive and independent inquiry into allegations of serious mismanagement by CSIRO in order to find the source, and to remedy these problems so that the deterioration of CSIRO’s reputation can arrested.

http://www.liberal.org.au/latest-news/2013/04/11/wong-carr-implicated-csiro-scandal

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Update – Drug giant to proble deal with CSIRO spin-off

Posted on April 11, 2013. Filed under: Uncategorized |

 

The CSIRO has tweeted that “the allegations raised by Fairfax this morning are new to CSIRO. We’re making enquiries to establish the facts.”

What rubbish!  CSIRO employees held senior executive or non-executive positions in the spin-off company at the time this deal was done.

Is this simply another example of a senior CSIRO executive  professing publicly to have no knowledge of an event which later they are forced to admit they were aware actually of?

Next thing we can expect is for the CSIRO to issue a breach of contract lawsuit against the pharmaceutical company for analysing the content to demonstrate that they were duped.

Date
April 11, 2013 – 3:02PM

Linton Besser and Nicky Phillips

CSIRO 

Global drug giant Novartis has confirmed it has begun an “internal investigation” into a five-year deal it signed with a CSIRO spin-off company to buy an anti-counterfeit technology which the CSIRO and its partner knew could be compromised.

Novartis purchased what it was told was a custom-designed invisible “tracer” which would protect millions of ampoules of injectible Voltaren, widely sold overseas but not in Australia, from the threat of the booming blackmarket trade in counterfeit medicines.

But a Fairfax investigation on Thursday revealed that DataTrace DNA Pty Ltd, a joint venture between the CSIRO and public company DataDot Technology Ltd, instead issued Novartis with widely available tracer material it had bought from China and which it was warned was insufficient for a pharmaceutical application.

DataDot Technology: The joint venture between DataTrace DNA and CSIRO which convinced Novatiris to buy an easily compromised product.DataDot Technology: The joint venture between DataTrace DNA and CSIRO which convinced Novatiris to buy an easily compromised product.

Alexandra Suvajac, a Novartis Australia spokeswoman, said the company had a number of measures to ensure the safe use of its drugs which were “not compromised by the allegations around the use of this technology”.

“I can confirm we are undertaking an internal investigation of the matter,” she said. “Novartis is aware of the story reported today and cannot comment further on the ongoing investigation.”

The CSIRO has tweeted that “the allegations raised by Fairfax this morning are new to CSIRO. We’re making enquiries to establish the facts.”

Shares in DataDot Technology have been put into a trading halt until Monday.

The company’s company secretary Graham Loughlin requested the halt as a result of “press coverage today of allegations regarding DataTrace DNA Pty Ltd, a subsidiary company”. DataTrace was half-owned by the CSIRO when it sold the anti-counterfeit technology to Novartis, which had sought a method to protect its injectable drugs, manufactured in Egypt, Slovakia and Switzerland.

In a series of assurances to Novartis, DataTrace had assured the drugs giant that the tracer was manufactured under secure conditions in a CSIRO laboratory in Melbourne.

In fact, the company issued it with phosphor-based tracer it had previously purchased from a lighting supplier in China which was considered sufficient only for low-security applications, such as batch and stock control or sorting industrial commodities.

Organised crime gangs have been dumping bootleg medicines in poor economies around the world at enormous profits in recent years. Last year an Interpol task force arrested 80 people after an international taskforce seized 3.75 million units of fake drugs worth $US10.5 million.

Hundreds of people around the world have died from being administered fake medicines.

“If there is a serious counterfeiting threat to the Novartis ampoules, then this code risks being quickly and easily cracked,” the project’s chief scientist, Gerry Swiegers, warned months before the deal was announced to the market. Dr Swiegers had begun work on the project while still a CSIRO employee, and then after a bitter falling-out with the organisation, he had joined DataTrace full-time.

“Serious questions could then be raised, especially if the successful counterfeiting attack resulted in injury or death.”

Mr Loughlin told the market this morning that “these matters require a response from the parent company”, which is DataDot.

“In order for the facts to be assembled and the response to be prepared we request a trading halt in our shares until the market opens on Monday 15th April or until DataDot Technology Limited makes an announcement to the market on this subject, whichever is sooner.”

The CSIRO remains a minority shareholder in DataDot.

Do you know more? investigations@smh.com.au


Read more: http://www.smh.com.au/technology/sci-tech/drug-giant-to-probe-deal-with-csiro-spinoff-20130411-2hnft.html#ixzz2Q8ENYABM

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Independent Investigator agrees to extend EAP services to former Employees

Posted on April 11, 2013. Filed under: Uncategorized |

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An Experiment in vial behiaviour

Posted on April 11, 2013. Filed under: Uncategorized |

I am only the sales guy….I’m not responsible.  Sounds familiar.  We wonder if CSIRO will attempt a similar defence of its unconscionable participation in such a “vial” deceit by claiming that it was the spin-off rather than the CSIRO own willful actions that resulted in such a catastrophic breach of trust!  We suspect so!

April 11, 2013

Linton Besser and Nicky Phillips

A high-tech CSIRO spin-off company was so desperate for cash it crossed the line.

<p></p>Science for sale: How the trace works.

Things had not been going well for DataTraceDNA until a glimmer of hope appeared in 2006.

In November that year, the firm signed a deal with a Las Vegas gaming company called VendingData Corporation, which wanted to protect its casino chips from being counterfeited. By embedding DataTrace’s invisible forensic marker into the chips, a technology made using a ”trade secret” method, the chips could be scanned by casino staff at the cashier to ensure they were were genuine.

For DataTrace, the deal meant some much-needed revenue. And for VendingData, the deal meant peace of mind. It had just bought anti-counterfeit technology from one of Australia’s most respected national brands – the Commonwealth Scientific and Industrial Research Organisation. Not only was DataTrace’s key technology a CSIRO invention, but Australia’s peak scientific body owned half the company. VendingData made it clear to the market that it did the deal because ”the patented inventions are owned by a national government statutory authority”.

With the money from the casino-chip deal in mind, DataTrace and its CSIRO partners began casting about for another similar deal in what is known as the ”high-security” field – protecting documents, currencies or highly sensitive components.

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So when DataTrace landed a five-year contract with one of the world’s biggest companies, it should have been a landmark moment for that firm and for the CSIRO. Instead, the contract it signed with Novartis, a Swiss global pharmaceutical firm, was built on a falsehood. The effect was that today, hundreds of millions of vials of injectable the anti-inflammatory Voltaren are potentially at risk of being counterfeited – worldwide. The once-secret deal raises questions about the conduct of the company and CSIRO management. Chief among them are: Was the deception of Novartis a singular and discrete mistake? Or was it emblematic of an organisation in crisis?

The breakthrough came in 2004. A team at the CSIRO discovered micro-particles of phosphor that carry a luminant pigment easily detected with a spectrometer. In essence, what they had found was an invisible, forensic marker because different phosphor formulas emitt different light frequencies. Officials immediately recognised the commercial possibilities. With a portable spectrometer at the far end of a supply chain, the phosphor-based ”tracer” could be used in stock and batch control for bulk products such as cement, timber and paint. It could even be used to authenticate explosives.

In August 2005, it set up a joint venture with DataDot Technology, a small public company that already sold authentication products for the motor-vehicle market. Initially, the CSIRO hoped the real money-spinner would be found in the resources sector, and it held talks with companies, including Rio Tinto. DataTrace tried to persuade several companies that it could help sort purer iron ore from contaminate and solve other similar problems. To pitch the idea and to test it, DataTrace bought several kilos of bulk lamp phosphor from a supplier to the lighting industry, DaMing Phosphor, in Hangzhou, China.

But the mining deals never went ahead and the Chinese phosphor sat in white jars stored at DataDot’s headquarters in Frenchs Forest in Sydney.

In March 2006, it secured its first customer – a plastics manufacturer – and then in November, it signed up VendingData. It began looking for other high-security deals, but the next two years were grim. A $10 million licensing deal with a Chinese distributor went sour after DataTrace received only a 10th of what it was owed. In 2007, it reported a $722,000 loss for the year, and in 2008, the loss was $586,000. ”It is taking longer than anticipated to bring revenue on stream from the sale of product”, it told the market.

The pressure was falling on the shoulders of DataTrace’s general manager, Greg Twemlow. So early the following year, when he saw that Novartis was seeking an anti-counterfeiting device for its glass ampoule drugs, he fired off an application. It is not clear what promises Twemlow made in the application, but the test results and specifications he sent were based on the white jars of phosphor stored in the office. Perhaps he felt the application was a long shot and he could have a better product made up later.

So to some, it was a shock when Novartis announced it had placed DataTrace on its shortlist. The company told Twemlow that it intended to come to Australia as ”you had informed us that your production facility and your labs are actually in Melbourne”. But there were two glaring problems.

The first was obvious – the tracer offered by Twemlow was not coming out of a DataTrace ”production facility” in Melbourne or anywhere else. It was being shipped in from eastern China. The second was really just a variation of the first. The Chinese tracer was cheap, widely available, and suitable for bulk goods that did not face a counterfeiting threat. But for high-security applications – such as protecting pharmaceuticals from the booming black-market trade in fake medicines – a custom formula was required.

The ex-CSIRO scientist working on the project, Gerry Swiegers, immediately recognised the danger, and urged DataTrace to switch the tracer. But what frightened them was that Novartis had been very clear about what it wanted. The tracer it bought was to be mixed into the ink painted on the neck of its drug vials, and in order to comply with medical-safety rules set by regulators, the tracer needed to take up no more than 2 per cent of the volume of the ink.

But so far, the higher security, self-manufactured tracers that CSIRO had come up with needed to be 5 per cent by volume. ”I have thought about your suggestion to introduce new markers and the security marker which I can’t agree with,” Twemlow wrote to Swiegers in June. ”We answered the RFP with a specific code and provided costing and test results. To move away from that now would either cause us to be dropped from the race or have the whole process restarted.”

Twemlow and others began work on the due diligence that Novartis demanded. But with each step they took towards closing the sale, the deception at the heart of the deal calcified. On July 30, 2009, Twemlow circulated a list of questions for which Novartis was seeking answers. It included: ”Where are the materials manufactured?” Under this, Twemlow wrote, ”Answer: at CSIRO’s Clayton campus.”

The same day, Patrik Merckell, the Novartis head of product security verification, wrote to Twemlow to organise the company’s visit. ”I would like to spend more time in your production facilities as this is a critical criteria for the final selection process,” he wrote.

The pressure mounted. A Novartis security consultant, Jacques Nahon, explained to Twemlow that a ”critical point” was that DataTrace be impregnable to any kind of counterfeit threat. ”You must absolutely have a clear concept and method of controlling the marker substance, not only in your own shop, but also at third-party sites which handle it.”

Novartis was clearly proceeding on the understanding it was getting a custom-designed tracer, and scheduled an audit visit for August 10-11. On August 7, Twemlow wrote to two senior CSIRO officials – Dr Peter Osvath and Dr Geoff Houston. The subject of the email was: ”Proposed answer to the question, ‘is our Tracer code commercially available,”’

”For your approval. This is how we propose to answer the question if it’s posed. We want everyone answering consistently.

”Answer: The CSIRO will make your Novartis codes using their Trade Secret methods and I’m sure you’ll appreciate the importance of secrecy for Novartis and all of our clients. Having said that there may well be a possibility that aspects of the code could be simulated with commercially available products. In that event we have mechanisms to deal with the challenge.”

When Nahon and the auditors arrived and toured the CSIRO facility, they were treated to a series of presentations, including Osvath’s, which was titled: ”CSIRO: secure supply and support for Datatrace DNA/Novartis project.” They left satisfied and began organising tests in Europe to ensure the tracer mixed with the ink and painted neatly on to the ampoules.

But Swiegers, who had left the CSIRO after a bitter falling-out, was becoming uneasy about what was being proposed. He was sure the solution being offered Novartis was not fit for purpose, and he raised concerns about ”safety and audit issues” in a formal meeting in December 2009. Then in the new year, he wrote a long email to Twemlow urging the company to consider putting a higher security ”sleeper” into the tracer.

”Greg, when we talked just before Xmas you indicated that if we used Chinese lamp phosphors in high security applications, then it would be ‘only a matter of time’ (your words, not mine) before the system would be copied and compromised. I also have that concern.”

”In that case, shouldn’t we move Heaven and Earth to ensure that we have a proprietary material like the security marker, that is difficult (impossible) to copy, present in our high-security products? The lamp phosphors were meant for bulk applications, not high security ones. This is especially significant in pharmaceutical applications where counterfeit pharmaceuticals could have serious safety implications (life-and-death implications).”

But the company forged on after Twemlow received an encouraging request to attend a meeting in Basel on February 3. With the final hurdle ahead, he began work on a ”highly confidential” 18-page report for a meeting scheduled for January 28, which was attended by CSIRO officials. The paper said precisely what it was selling to Novartis.

”We currently source end-product, i.e. we deploy the product as purchased by us for our clients,” the paper said, explaining that the tracers available were far cheaper from their supplier in China than another company in Britain. ”Our view is that we need to move to making Tracers that have non-standard emissions … on this basis the UK or Chinese phosphors become an input material … given this approach the source of the input material is less of an issue.”

”The key question from our clients has generally been ‘Do we make our own Tracers?’

Our answer has always been that CSIRO handles this.”

The tempo continued when Novartis confirmed a pilot run would go ahead in Cairo in April.

DataTrace and CSIRO did make significant efforts to put itself into a position to abide by its representations. Osvath and two other CSIRO scientists began trying to replicate the DaMing phosphor. Despite this, Swiegers was experiencing an ”increasing sense of disquiet”. In a last-ditch effort to alert the company to the dangerous territory it was in, he wrote another strongly worded letter to DataTrace.

”The code which has been offered to Novartis may not be fit for purpose,” he said. ”We have another code – a proprietary security marker – that is suitable for high-risk, safety-related applications. It is not commercially available.”

”Greg appears, however, to have created the impression with Novartis that the brand-protection code we are offering is a high-security one suitable for high-risk, safety-related applications. Indeed, he has roped in CSIRO to synthesise the brand-protection code, to reinforce that impression. However, the brand-protection code that CSIRO would be synthesising can be bought from a wide variety of other vendors. If there is a serious counterfeiting threat to the Novartis ampoules, then this code risks being quickly and easily cracked in a counterfeiting attack. Serious questions could then be raised, especially if the successful counterfeiting attack resulted in injury or death.”

The effort to fool Novartis reached an almost absurd climax. As the eve of the signing approached, Twemlow, Osvath and Houston became concerned about any further audits by the pharmaceutical company. So, in May, they began working on upgrading a laboratory on the Clayton campus – Lab 3.22 in Building 207 – to Novartis security specifications.

Osvath sent an $8000 quote for the work to Twemlow, which included a new wall and door, and security access readers, and asked him to approve the job quickly ”to ensure speedy action, especially if Novartis decides to pay a visit in the near future to audit the facility”.

”I was wondering whether it would also suit DataTrace’s purposes, to have signage on the door, identifying the area as a ‘DataTrace Lab’ – while it will be used for other purposes … it might be useful for you, and not stretching the reality too far,” Osvath wrote on May 12.

The deal was announced on July 27, 2010. But it seems that efforts by CSIRO to replicate the cheap Chinese tracer were for nought. A year later, DataTrace ordered another 150kg of the same Novartis codes from DaMing.

On Wednesday, DataTrace declined to comment citing confidentiality restrictions.

Twemlow said he, too, was bound by confidentiality agreements, but said in his defence he was only ”the sales guy” and the deal had been ”ratified” by the company.

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CSIRO Partner place in trading holt over damning evidence

Posted on April 11, 2013. Filed under: Uncategorized |

CSIRO partner company placed in trading halt after global drugs giant duped

Date
April 11, 2013 – 10:52AM

Linton Besser, Nicky Phillips

CSIRO 

DataDot Technology Ltd, a partner company to the CSIRO, has been placed in a trading halt by the Australian Securities Exchange after a Herald investigation revealed it and the country’s peak scientific body had duped one of the world’s biggest pharmaceutical companies in a major transaction.

DataDot’s company secretary Graham Loughlin requested the trading halt as a result of “press coverage today of allegations regarding DataTrace DNA Pty Ltd, a subsidiary company”. Shares in the company will be traded again by Monday.

DataTrace was 50 per cent owned by CSIRO when it sold an anti-counterfeit technology, which they were warned could be easily compromised, to Novartis, the Swiss-based pharmaceutical giant.

DataDot Technology: The joint venture between DataTrace DNA and CSIRO which convinced Novatiris to buy an easily compromised product.DataDot Technology: The joint venture between DataTrace DNA and CSIRO which convinced Novatiris to buy an easily compromised product.

Instead of selling it what it promised – a custom-designed microscopic tracer manufactured in-house by the CSIRO – DataTrace instead issued it cheap chemicals from China that were widely available and could be easily cracked by counterfeiters.

Organised crime gangs have been dumping bootleg medicines in poor economies around the world at enormous profits in recent years, prompting an Interpol task force that targeted 100 countries last year and netted 3.75 million units of fake drugs.

Novartis had wanted to protect the hundreds of millions of ampoules of injectable Voltaren (which is not registered for use in Australia) from precisely such an attack when it signed a five-year deal with DataTrace in 2010.

But a Herald investigation on Thursday has revealed Novartis was deliberately misled both by DataTrace executives and CSIRO officials in the transaction, reporting damning internal warnings that the “tracer” being issued to the company was not fit for the purpose.

“If there is a serious counterfeiting threat to the Novartis ampoules, then this code risks being quickly and easily cracked,” the project’s chief scientist, Dr Gerry Swiegers, warned months before the deal was announced to the market.

“Serious questions could then be raised, especially if the successful counterfeiting attack resulted in injury or death.”

Mr Loughlin told the market this morning that “these matters require a response from the parent company”, which is DataDot.

“In order for the facts to be assembled and the response to be prepared we request a trading halt in our shares until the market opens on Monday 15th April or until DataDot Technology Limited makes an announcement to the market on this subject, whichever is sooner.

The CSIRO remains a minority shareholder in DataDot.

Do you know more? Email investigations@smh.com.au

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CSIRO duped global drug firm with generic chemicals as ‘secret formula’

Posted on April 11, 2013. Filed under: Uncategorized |

And another….

CSIRO duped global drug firm with generic chemicals as ‘secret formula’

Date
April 11, 2013

Linton Besser and Nicky Phillips

Test Tube Being Held By A Gloved Hand .  Research & Development .  R & D .  Laboratories .Pharmaceutical counterfeiting is a major problem globally. Photo: Virginia Star

The CSIRO has duped one of the world’s biggest pharmaceutical companies into buying anti-counterfeit technology that could be easily compromised – passing off cheap chemicals it had bought from China as a ”trade secret” formula.

Swiss-based multinational Novartis signed up two years ago to use a CSIRO invention it was told would protect its vials of injectable Voltaren from being copied, filled with a placebo and sold by global crime syndicates.

Drug counterfeiting is big international crime. An Interpol strike force last year in 100 countries led to the seizure of 3.75 million units of fake drugs, and the arrest of 80 people.

CSIRO 

The invention sold to Novartis to protect against such counterfeit attacks – a microscopic chemical powder mixed into the ink that is painted on the neck of its Voltaren ampoules – was being marketed by DataTrace DNA Pty Ltd, a joint venture of CSIRO and DataDot Technology Ltd, a publicly listed company.

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But a Fairfax investigation has established that senior CSIRO officials and DataDot executives deliberately misled Novartis about the technology in order to close the deal, after receiving explicit internal warnings that the Novartis code could be easily duplicated.

Now, hundreds of millions of Voltaren ampoules across the world could carry the easily compromised DataTrace product. The injectable version of the drug is not approved for use in Australia.

DataDot Technology: The joint venture between DataTrace DNA and CSIRO which convinced Novatiris to buy an easily compromised product.DataDot Technology: The joint venture between DataTrace DNA and CSIRO which convinced Novatiris to buy an easily compromised product.

Three months before the deal was signed, the key ex-CSIRO scientist working on the technology, Dr Gerry Swiegers, warned against proceeding with the deal.

”The code which has been offered to Novartis may not be fit for purpose … because the code material is commercially available from a variety of vendors,” he wrote to DataTrace in March 2010.

”If there is a serious counterfeiting threat to the Novartis ampoules, then this code risks being quickly and easily cracked in a counterfeiting attack. Serious questions could then be raised, especially if the successful counterfeiting attack resulted in injury or death.”

Greg Twemlow. Driving force behind the deal: DataTrace manager Greg Twemlow. Photo: Supplied

Dr Swiegers, who was retrenched from CSIRO after a bitter falling-out, has since been agitating for reform of the peak scientific body.

The deal went ahead in July 2010. And despite having promised to supply a unique tracer code specifically for Novartis, DataTrace instead issued the company a cheap tracer it had previously bought in bulk from a Chinese distributor.

The bulk tracer originally had been earmarked to sell to mining multinationals for low-risk applications such as sorting high from low-quality iron ore.

Gerry SwiegersWarning: Dr Gerry Swiegers advised DataTrace to proceed with caution. Photo: Adam McLean

Such applications had no real security concerns, and this tracer formula was widely available at the time.

But when DataTrace sold the same agent to Novartis, it told the company the formula was a trade secret, and Novartis is believed to have been contractually forbidden from trying to identify its make-up – a standard industry practice.

Had Novartis reverse-engineered the tracer potentially in breach of its contract, it would have been able to identify its components and check whether the phosphor formula was available elsewhere. In fact, at least two firms were selling the identical material to hundreds of firms around the world.

Damning internal documents seen by Fairfax show DataTrace and some of the most senior officials at the CSIRO knew that Novartis was being misled in a deal believed to be worth $2.5 million.

On August 7, 2009, Greg Twemlow, the DataTrace general manager who engineered the deal with Novartis, emailed Peter Osvath, a CSIRO research group leader, and Geoff Houston, a CSIRO commercial manager, with this subject line: ”Proposed answer to the question, ‘is our Tracer code commercially available’.”

”This is how we propose to answer the question if it’s posed. We want everyone answering consistently. Answer: The CSIRO will make your Novartis codes using their Trade Secret methods and I’m sure you’ll appreciate the importance of secrecy for Novartis and all of our clients. Having said that, there may well be a possibility that aspects of the code could be simulated with commercially available products.”

But it was much more than a possibility.

Counterfeiting was such a serious commercial and public health risk that Novartis went to extraordinary lengths to ensure DataTrace and CSIRO had security measures in place to prevent the code being cracked.

In August 2009, a team of auditors from Novartis visited CSIRO’s Clayton campus.

A year later, proposed changes were made to the lab, the Novartis auditors were satisfied by CSIRO’s security measures, and in July 2010 DataTrace inked a five-year deal.

Just three months after the deal was announced to the market, CSIRO sold its 50 per cent stake in the company, worth $1.3 million, in return for 8.93 per cent of DataDot Technology Ltd.

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How the CSIRO cheated a global drugs giant (http://www.smh.com.au)

Posted on April 11, 2013. Filed under: Uncategorized |

It is unsurprising to see this story in the media this morning and suspect that this may only be the tip of the iceberg, given recent revelations including senior CSIRO employees who prove unreliable witnesses during legal or tribunal proceedings, are support by a CEO that defends and legitimises their actions and permits her media relations staff to attack journalists who are critical of the organisation.

The fact that it appears that it is a common practice for senior executives of the CSIRO to appear before parliamentary committees to make deceitful or misleading comments, or to publicly attack the credibility of potential witnesses prior to the commencement of its own “independent” investigation of allegations, in which the investigator is funded by and reports to the very people who may very well be implicated in the misconduct under investigation.

This is certainly not the first instance in which the CSIRO has stood accused of engaging in unscrupulous and unethical behaviour.  The long term followers of this website will be familiar with previous material published in relation to former CSIRO Scientist, Dr Fred Prata, who perfected a world-class technology to detect clouds of volcanic ash enabling air traffic to navigate around such hazards that have previously grounded much of the world’s commercial airline traffic for extended periods.

Dr Prata left CSIRO after being pressured by the CSIRO to patent the technology which had not been fully-tested or perfected.  The CSIRO unsuccessfully attempted to patent the technology in the absence of Dr Prata.  Unsurprisingly both Dr Prata and his research were taken up by overseas interests, in a massive loss to Australia.

 

EXCLUSIVE

CSIRO 

The CSIRO has duped one of the world’s biggest pharmaceutical companies into buying anti-counterfeit technology which could be easily compromised – passing off cheap chemicals it had bought from China as a ”trade secret” formula.

The Swiss-based multinational Novartis signed up two years ago to use a CSIRO invention it was told would protect its vials of injectible Voltaren from being copied, filled with a placebo and sold by crime syndicates.

I’m sure you’ll appreciate the importance of secrecy.

Police and drug companies are battling counterfeiters who are selling fake medicines that have killed hundreds of people. Last year Interpol seized 3.75 million units of fake drugs and arrested 80 people.

DataDot Technology: The joint venture between DataTrace DNA and CSIRO which convinced Novatiris to buy an easily compromised product.DataDot Technology: The joint venture between DataTrace DNA and CSIRO which convinced Novatiris to buy an easily compromised product.

The invention sold to Novartis to protect against such counterfeit attacks – a microscopic chemical powder painted on the neck of its Voltaren ampoules – was being marketed by DataTrace DNA, a joint venture of CSIRO and DataDot Technology, a publicly listed company.

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But a Fairfax investigation has established that CSIRO officials and Datadot executives misled Novartis about the technology in order to close the deal, after receiving explicit internal warnings the Novartis code could be easily duplicated.

Now, hundreds of millions of Voltaren ampoules across the world could carry the easily compromised DataTrace product. The injectible version of the drug is not approved for use in Australia.

Greg Twemlow. Driving force behind the deal: DataTrace manager Greg Twemlow. Photo: Supplied

Three months before the deal was signed, the scientist working on the technology, Gerry Swiegers, issued a last caution against proceeding. ”The code which has been offered to Novartis may not be fit for purpose … because the code material is commercially available from a variety of vendors,” Dr Swiegers wrote to DataTrace in March 2010. ”If there is a serious counterfeiting threat to the Novartis ampoules, then this code risks being quickly and easily cracked in a counterfeiting attack. Serious questions could then be raised, especially if the successful counterfeiting attack resulted in injury or death.”

But the deal went ahead anyway in July 2010. And despite having promised to supply a unique tracer code, DataTrace issued Novartis cheap tracer it had bought in bulk from a Chinese distributor.

The bulk tracer had been earmarked for low-risk applications with no real security concerns. But when DataTrace sold it to Novartis, it said the formula was a trade secret, and Novartis is believed to have been contractually forbidden from trying to identify its make-up.

Asked in general about industry practice, Jeff Conroy, the chief technology officer of Authentix, a rival company, said it was common ”to require either a non-disclosure agreement and/or a non-reverse engineering clause when supplying a security material”. It would be ”very typical” to not disclose the precise material used in the tracer.

Had Novartis reverse-engineered the tracer potentially in breach of its contract, it would have been able to identify its components and check whether the phosphor formula was available elsewhere. In fact, at least two firms were selling the identical material to hundreds of firms around the world.

Damning internal documents seen by Fairfax show DataTrace and some of the most senior officials at the CSIRO knew that Novartis was being misled in a deal believed to be worth $2.5 million.

On August 7, 2009, Greg Twemlow, the DataTrace manager who engineered the deal with Novartis, emailed CSIRO managers Peter Osvath and Geoff Houston with this subject line: ”Proposed answer to the question, ‘is our Tracer code commercially available’.”

”This is how we propose to answer the question if it’s posed. We want everyone answering consistently. Answer: The CSIRO will

make your Novartis codes using their Trade Secret methods and I’m sure you’ll appreciate the importance of secrecy for Novartis and all of our clients. Having said that there may well be a possibility that aspects of the code could be simulated with commercially available products.”

But it was much more than a possibility. Mr Twemlow himself confirmed this was the case in a ”highly confidential” paper he prepared for a January 2010 DataTrace meeting attended by CSIRO officials. ”We currently source end-product, ie we deploy the product as purchased by us for our clients,” it said.

A leaked email list from one of the potential suppliers of the phosphor, a British company called Phosphor Tech, ”indicates that many hundreds of companies could be buying the same materials we use for Tracers”.

”The key question from our clients has generally been, ‘Do we make our own Tracers?’ Our answer has always been that CSIRO handles this.”

Mr Twemlow himself understood the risks, according to internal company correspondence. ”Greg, when we talked just before Xmas [2009] you indicated that if we used Chinese lamp phosphors in high security applications, then it would be ‘only a matter of time’ (your words, not mine) before the system would be copied and compromised,” Dr Swiegers wrote in January 2010.

”The lamp phosphors were meant for bulk applications, not high security ones. This is especially significant in pharmaceutical applications where counterfeit pharmaceuticals could have serious safety implications (life-and-death implications).”

Mr Twemlow said on Wednesday he was bound by confidentiality agreements but that ”it was a detailed and complex proposal to a large company … I was the sales guy.” He said the final decision on the transaction was taken by others.” Dr Swiegers, who was retrenched from CSIRO after a bitter falling-out, has since been agitating for reform of the peak scientific body.

Counterfeiting was such a serious commercial and public health risk that Novartis went to extraordinary lengths to ensure DataTrace and CSIRO had security measures in place to prevent the code from being cracked.

In April 2010, Dr Osvath completed a Novartis questionnaire guaranteeing the ”protocols” CSIRO would employ ”for secure freight logistics … with appropriate security measures”.

The next month he sent an email to Mr Twemlow and others regarding an $8000 quote to create a ”secure lab” at the organisation’s Clayton campus in Melbourne. The money was spent installing a wall and security access readers on the lab doors – features which may have assisted in convincing Novartis that its tracer code could not be compromised.

”I was wondering whether it would also suit DataTrace’s purposes, to have signage on the door, identifying the area as a ‘DataTrace Lab’,” he wrote. ”While it will be used for other purposes … it might be useful for you, and not stretching the reality too far.”

In fact, a team of auditors from Novartis had already visited Australia to check on the company’s claims. In August 2009, the team visited CSIRO’s Clayton campus and was given a series of presentations by the company, including one by Dr Osvath on ”CSIRO: secure supply and support for DataTrace DNA/Novartis project”.

In July 2010 DataTrace announced a five-year deal with an unnamed pharmaceutical company to the stock exchange.

Just three months after the deal was announced to the market, CSIRO sold its 50 per cent stake of the company, worth $1.3 million, for 8.93 per cent of DataTrace’s parent company, DataDot Technology.

Do you know more? investigations@smh.com.au

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