Isaac Kaye

Background

Isaac Kaye (born South Africa) is Deputy Chief Executive of the IVAX Corporation and Chairman of Norton Healthcare. in 2002, he is described by the Guardian as being a 'seventysomething multi-millionaire' who 'moved to Britain in 1985, took Irish citizenship and salted away a small fortune in a Channel Islands trust fund from a US business deal'. In 2008, Kaye is reported to be 78 years of age

Kaye's first company in Britain was called Harris, which was sold to Florida based IVAX Corpin in 1990. Harris was then renamed Norton Healthcare, which was later changed to Ivax Pharmaceuticals UK. Kaye is reported to have 'made £23m from the deal and has a £12m stake in the parent company'.

The Ivax Corporation is a huge Florida-based health company. Norton Healthcare, the largest generic drugs company in Britain, is a subsidiary of IVAX. Kaye earned $550,301 at IVAX in 1998 (plus share options worth up to $1.5 million) and $521,520 in 1997.. In ??? IVAX was aquired by Teva which is described as 'Israel's largest company'. The aquisition is reported to have created 'the world's largest generics company'. He lives in a luxury apartment in Grosvenor Square, London.. In 2002, Kaye is reported to live in Mayfair.

Kaye is reported to have stepped down as chairman of Norton Healthcare in 2003

South Africa's Apartheid regime

Kaye was a supporter of the South Africa's Apartheid regime, the Afrikaner-led National party. Such claims are reported to be contested by Kaye’s lawyer. However, as Osler states, 'it was admitted that Kaye did back one National Party candidate on grounds of childhood friendship' (John Erasmus)and Osler reports that Kaye offered National Party minister for health Dr Lapa Munnik the 'use of cars to transport supporters to the polls at a crucial 1979 by-election'. Munnik is described as 'an apartheid stalwart who threatened to close Catholic schools if they dared to admit non-white pupils'. Kaye also served on the board of South African Druggists (1977-1982) whose 'executives were also seconded to assist the election efforts of the Afrikaaner-led National Party'.

An award-winning investigation by the South African journalist Martin Welz, also alleges that Kaye seconded one of his company's executives to campaign for another candidate, Gerrit Bornman. Bornman is reported to have told the Express that Kaye had been a "substantial" backer of the National party.

Financing Labour

Kaye spent £5,000 in 1997 and 1998 on tickets for Labour gala dinners and donated £100,000 to Labour in 1999. He also gave £10,000 to the London mayoral campaign of Frank Dobson, the former Labour health secretary. According to The Guardian, the Labour party has declined to comment on its relationship with Kaye. He gave the Labour Party more than £5,000 in 2000.

In 2008, The Independent reports that Kaye donated nearly £15,000 to Peter Hain through the Progressive Policies Forum (PPF) think tank (which was set up three months after the launch of Mr Hain's campaign) to finance Hain's failed deputy leadership campaign. The Progressive Policies Forum was set up by John Underwood (former director of communications for the Labour Party, founder of Clear Communications and Business Development Director of Freshwater UK) in 2006 and 'channelled over £50,000 in donations and loans to Peter Hain's deputy leadership campaign'. The report continues by stating that the PPF 'has no staff, no board, no website and no published research'. Hain appeared as a guest of honour at Freshwater's table at a Labour fund-raising dinner and publicly praised Freshwater as a "modern, dynamic company" that he wanted to see go "from strength to strength". He is reported to have "absolutely no regrets" over his links to the company.

Hain is reported to have been an anti-apartheid campaigner, yet Kaye's support of the pro-apartheid National Party did not stop him from taking the money. This leads us on to a crucial question when it comes to the financing of political parties, a question of how morals and ideals can be swept aside in the process of securing finances. How 'money trumps principle every time'. As Monbiot states...

'You enter politics with the highest ideals and end up grovelling to multi-millionaires. Campaign finance is not the only reason for the corruption of leftwing political parties. But any system without a cap on individual donations encourages the mass abandonment of political programmes. You need to spend much less time and effort and money to secure thousands of pounds from a rich man than to shake it out of the piggybanks of hundreds of new members. Who can blame you if you adjust your programme to please the millionaires?'

In 2006 and 2007, 27% of Labour's money came from individual donations of more than £100,000. As Monbiot describes, 'Aside from the largesse of Lord Sainsbury and Lakshmi Mittal, almost all of this is City money, much of it from men who run private equity companies. To what extent this influences Labour's failure to tax the super-rich, we will never know - which is, of course, the problem'.

Gifts for influence

The Guardian reported that...

'Kaye was caught up in a "gifts for influence" scandal in South Africa during the early 1980s amid claims that doctors were being rewarded with everything from cars and TVs to swimming pool equipment and chandeliers for prescribing drugs made by his then firm. He denied any impropriety, saying the giving of presents was not an inducement but an appreciation'.

Moniot adds that the 'gifts' given by Kaye's drugs company (Alumina) went 'to people working in the health sector, including academics who sat on the South African government's advisory panels, the head of the Medical Research Council and the minister of health'. The list of 'gifts' also included shares and trips abroad. The official inquiry into the scandal found that Kaye had "no scruples about applying dishonest or unethical methods".

In 1996, Norton Healthcare was severely condemned by the British Pharmaceutical Association for offering "unnacceptable inducements" (including mountain bikes and Marks and Spencers vouchers) to pharmacists who increased their orders for Norton products.. It is reported that Labour's health minister complained that "it is completely unacceptable for pharmaceutical companies to encourage health professionals to use their products through free gifts and other sweeteners".

In 1998, the government announced that it was giving Norton a £990,000 Regional Selective Assistance grant to set up a new plant in London. The purpose of this grant is to boost employment in the local area and to promote "inward investment in the manufacturing sector". Yet, as The Guardian goes on to report, Norton's parent company revealed that it would stop manufacturing in the UK (and move to Ireland) the week before the government announced this funding! In October 1998 it closed down all its other manufacturing and packaging plants in South East England and moved them to Ireland, cutting 500 jobs in the process. This "re-structuring" helped the IVAX Corporation's share price to rise by 80% in 1998 - Kaye is the second largest shareholder, with a stake worth $136 million held by the I. Kaye Family Trust (via a Guernsey-based company called Charter Trust, which in turn hold the shares via another company called Azure Ltd).

Barring Union Activity - a violation of rights

Kaye refuses to recognise Trade Unions at Norton Healthcare because they are "not in line with company philosophy"! According to Osler, 'In May 2000, a Kentucky judge ruled that Norton unlawfully violated the rights of its nurses at one of its US hospitals, by barring them from union activity in their own time. This was held to be in violation of the National Labor Relations Act'.

NHS £400m rip-off?

When Frank Dobson was Health Minister he called on the NHS to save money by buying cheaper generic drugs, rather than expensive name brands. However, as NHS spending shifted to the generic drugs, their prices increased too - for instance, by 1999 the price of a pack of Norton Healthcare Thyroxine tablets had increased from £6.84 12 months earlier, to £44.89! As a result the NHS doesn't save money, but the IVAX Corporation makes huge profits. As stated by Osler, 'Such tactics saw Ivax’s profits rise over 70% in 2000, despite a 12% decline in turnover'. IVAX's "Easi-Breathe" inhaler has been named a Millennium Product by the Government and is displayed in the Dome.

In 2002 The Guardian reported that, Kaye's company was 'raided by police investigating an alleged £400m rip-off of the NHS' and was 'one of six firms suspected of being involved in a price fixing cartel to push up prices charged to the NHS'. IVAX denied any 'wrongdoing'. After initial enquiries carried out by the Counter Fraud Directorate of the Department of Health, The Serious Fraud Office (SFO) began an investigation 'into a suspected conspiracy to defraud the NHS in relation to prices charged by suppliers for prescribed penicillin based antibiotics and warfarin between 1st January 1996 and 31st December 2000'.

The six pharmaceutical companies being investigated were:

• Generics UK Ltd.
• Kent Pharmaceuticals Ltd.
• Regent-GM Laboratories Ltd.
• Goldshield Group Plc.
• Norton Healthcare Ltd - a subsidiary of Ivax Corporation
• Ranbaxy (UK) Ltd - a subsidiary of Ranbaxy Laboratories Ltd

The SFO later (27th April 2006) reported that nine persons appeared in court on 'charges of conspiracy to defraud the National Health Service' along with 5 Companies (including Norton Healthcare) 'on conspiracy to defraud charges'. The 'persons' were Jonathan Raymond Close and Nicholas Mark Foster (both formerly of Norton Healthcare Limited) alongside Denis William O’Neill and John Stephen Clark (of Kent Pharmaceuticals Limited), Luma Auchi (formerly of Regent-GM Laboratories), Michael John Frederick Sparrow (formerly of Generics (UK) Limited), Anil Kumar Sharma (formerly of Ranbaxy (UK) Limited), Ajit Ramanlal Patel and Kirti Vinubhai Patel (of Goldshield Group Plc). It is not clear what the outcome of the charges were, however The Guardian makes reference to the case in 2008, in reporting that Norton Healthcare 'is now subject to the biggest prosecution for alleged fraud ever launched in the United Kingdom'. The Western Mail adds that the trial is due to start in September 2008. On the 9th April 2006 (shortly before the companies appearance in court), Medical News Today reported that The Department of Health and Norton Healthcare Ltd and Norton Pharmaceuticals Ltd had 'jointly announce settlement of the claims'. Norton did not admit any liability in relation to the charges but did pay compensation to the NHS for the amount of £13.5 million. In the report, Jim Gee (Director of Counter Fraud Services for the Department of Health) stated that "Norton is the third of the defendant companies to have recognised the strength of the claim made by the NHS..."

Subsidiaries

The IVAX Corporation's other subsidiaries include Zenith Goldline Pharmaceuticals, Goldcaps Inc., Diamedix Corporation, Baker Norton Pharmaceuticals, Immunovision and DVM Pharmaceuticals (all based in Florida), Gelkaps GmbH (Germany), Elvetium S.A. (Argentina), Baker Norton Asia (Hong Kong), Delta Biologicals (Italy) and Galena a.s. Opava (Czech Republic).

Affiliations

• Labour Friends of Israel

• Hebrew University of Jerusalem - Patron of Applied Research. At the university, Kaye also acted as Chair for the University's 'South African Friends' organization and was a member of the Board of Governors. Kaye also established the Isaac and Myrna Kaye Chair in Immunopharmacology at the Hebrew University of Jerusalem's School of Pharmacy in 1995.

• Israel Healthcare Ventures (IHCV) - Kaye is a founding member of the IHCV which was created in 2001. The IHCV describes itself as 'a venture capital fund dedicated to providing venture capital investment to Israeli life sciences companies'.