The government’s top administrative watchdog has found Hanmi Pharmaceuticals made a delayed report about the serious adverse effects of its lung cancer treatment but failed to confirm the drugmaker conspired to conceal the problem.

Under the Pharmaceutical Affairs Act, regulators can take administrative measures against the violators of reporting obligations, but there are no rules to punish companies which put off their reporting of grave atypical responses intentionally or cover up such problems.

Releasing the results of investigation into Hanmi’s alleged cover-up of the ill effects of its anti-lung cancer drug, Olita Tab, the Board of Audit and Inspection said Monday it had instructed the Ministry of Drug and Food Safety (MDFS) to work out and include penalty provisions in the related act so that regulators can punish firms that try to conceal grave side effects or hide them.

Olita Tab caused severe skin-related side effects in three patients who participated in clinical trials – toxic epidermal necrolysis in two patients and Stevens-Johnson Syndrome (SJS) in one – leading to two deaths. One of two patients hit by toxic epidermal necrolysis died, but the other one recovered. Hanmi immediately reported the two cases to the ministry. However, it reported the SJS case 14 months after it occurred, judging the patient died of aggravated cancer, not the side effects.

In the audit, BAI acknowledged the delay in reporting but could not attest to intentional concealment saying, "There was no evidence that the four departments within the company delayed reporting on purpose.”

The ministry temporarily stopped the prescription of Olita on Sept. 30.