DataDot Technology has launched an internal investigation into revelations that it and its partner, the CSIRO, had duped one of the world's biggest pharmaceutical companies into buying a compromised anti-counterfeit device.
The CSIRO, and Novartis, which bought the DataTrace technology to protect hundreds of millions of ampoules of injectible Voltaren, are still undertaking their own inquiries into the affair.
In 2010, DataDot's joint venture with CSIRO, DataTrace DNA Pty Ltd, signed a five-year deal with Novartis to supply a custom-designed high-security forensic ''tracer'' - to be manufactured by CSIRO - to protect Voltaren vials from a booming black-market trade in fake medicines.
A Fairfax investigation revealed last week that the company misled Novartis. Despite promising Novartis that CSIRO would supply a unique, high-security tracer code, DataTrace instead issued Novartis with cheap, widely available phosphor it bought from China for low-security applications.
A former DataTrace employee has confirmed the Fairfax report.
The executive, who is not a scientist but who asked not to be identified, said: ''There was never a clear intention to deceive, by any means, but pragmatic business decisions [were taken which] means you could interpret it as a deception.''
DataDot announced the company's general counsel will conduct a thorough inquiry. Later, spokesman David Symons added: ''DataDot rejects the allegation that 'it knowingly sold a compromised anti-counterfeit device' ... DataDot believes that the DataTrace security solution supplied to the customer is effective and appropriate for its intended application''.
DataDot also said Fairfax's stories ''contain the false claim that in the case of the European pharmaceutical customer single tracers are bought in bulk by DataTrace, rebranded and resold to the customer.
''In fact, DataTrace supplies the European pharmaceutical company a suite of formulations using more than one formula.''
However, confidential internal company documents seen by Fairfax, including a purchase order, show that the two formulas used to make up the code that was issued to Novartis were both bought from DaMing, a fluorescent lighting supplier in China.
The former DataTrace employee said the company did not do anything to the chemicals it bought from DaMing before passing them off to Novartis as a ''trade secret'' technology.
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