TOKYO—Swiss drug giant Novartis AG faces a mounting problem in Japan, its second-largest market, where researchers have retracted studies that touted the benefits of the company's most popular medicine.

Two university-led investigations into Novartis-related research discovered data had been altered to produce inaccurate results. Novartis denies involvement in the alleged research distortions, and stands by the efficacy of its blockbuster heart medicine Diovan.

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