Drug manufacturer Novo Nordisk Inc. has agreed to pay a total of $58.65 million to settle allegations that it misled doctors to boost sales of its diabetes drug Victoza. Novo Nordisk is a Danish company that generates most of its revenues from diabetes drugs. Its headquarters in the U.S. is in Plainsboro, New Jersey. The federal investigation into its marketing and sales practices began in February 2011.
The Justice Department said their resolution with Novo Nordisk includes the latter having to pay the US government $12.15 million for alleged violations of the Federal Food, Drug, and Cosmetic Act (FDCA) from 2010 to 2012 and another $46.5 million for alleged violations of the False Claims Act (FCA) from 2010 to 2014.
Under the False Claims Act (FCA) settlement, the federal government stands to receive more than $43 million and state Medicaid programs more than $3 million. The Medicaid program is funded jointly by the state and federal governments. Novo Novartis said the settlement would not threaten their solvency. Its shares remain healthy and looking up by October 3, a month after they announced the settlement. The deal does not mention how much the whistleblowers would receive.
Both the Justice Department and Novo Nordisk said in separate statements the settlement also resolved seven lawsuits filed under the whistleblower provision of the federal FCA, which allows private parties to file suit on behalf of the United States for false claims and share in a portion of the government’s recovery.
The U.S. Department of Health & Human Services, Office of Inspector General, determined that it would not seek a Corporate Integrity Agreement as part of this settlement.
Illegal marketing moves
In the government’s civil complaint filed early last month, it detailed Novo Nordisk’s marketing tactics that render the drug “misbranded under the law.”
It said that when the Food and Drug Administration (FDA) approved the diabetes drug Victoza in 2010, the FDA required Novo Nordisk to disclose the drug’s potential risk of Medullary Thyroid Carcinoma (MTC) to doctors. But the drug manufacturer allegedly failed to comply because, on the contrary, it instructed its sales representatives to obscure the risk and to impress on doctors that the required disclosure on Victoza’s risk is “erroneous, irrelevant, or unimportant.”
“We need to trust that pharmaceutical companies truthfully represent their products’ potential risks,” said Special Agent in Charge Nick DiGiulio for the U.S. Department of Health and Human Services Office of the Inspector General (HHS-OIG).
The government said Novo Nordisk also did not modify its risk evaluation and mitigation strategy for Victoza even when told to do so. In 2011, they had polled doctors and found out that half of them were unaware of Victoza’s potential risk for MTC.
On top of all these, Novo Nordisk allegedly encouraged the sale to and use of Victoza by adult patients who did not have Type II diabetes. The Food and Drug Administration (FDA) has not approved Victoza as safe and effective for use by adult patients who do not have Type II diabetes.
The parties said the settlement is just a way for them to avoid the delay, uncertainty, inconvenience, and expense of protracted litigation. It clarified that the allegations would remain as such.
The seven civil lawsuits resolved in the settlement are as follows: United States, et al. ex rel. Kennedy, v. Novo A/S, et al., No. 13-cv-01529 (D.D.C.), United States, et al. ex rel. Dastous, et al. v. Novo Nordisk, No. 11-cv-01662 (D.D.C), United States, et al., ex rel. Ferrara and Kelling v Novo Nordisk, Inc., et al., No. 1:11-cv-00074 (D.D.C.), United States, et al., ex rel. Myers v. Novo Nordisk, Inc., No. 11-cv-1596 (D.D.C.), United States, et al. ex rel Stepe v. Novo Nordisk, Inc., No. 13-cv-221 (D.D.C.), United States et al. ex rel Doe, et al. v. Novo Nordisk, Inc., et al., No. 1:17-00791 (D.D.C.), and United States ex rel. Smith, et al. v. Novo Nordisk, Inc., Civ. Action No. 16-1605 (D.D.C.). #