Novo to Pay $59 Million to Resolve U.S. Diabetes Drug Probe

(Bloomberg) -- Novo Nordisk A/S agreed to pay $58.7 million to resolve a U.S. Justice Department probe of the company’s allegedly illegal marketing of its diabetes drugs, including its top seller Victoza.

Novo Nordisk agreed to resolve eight lawsuits accusing the Danish drugmaker of downplaying warnings for Victoza and misleading doctors by disguising salespeople as medical educators and paying kickbacks to persuade doctors to prescribe its medicines, according to court filings.

The accord settles the U.S.’s claims that Novo Nordisk failed to comply with a Food and Drug Administration requirement that the company give physicians information about Victoza’s potential cancer risk, the Justice Department said in a statement Tuesday. Internal whistle-blowers leveled other allegations over the company’s marketing.

“When a drug manufacturer fails to share accurate risk information with doctors and patients, it deprives physicians of information vital to medical decision-making,” said Chad Readler, the acting head of the department’s civil division.

The U.S. said Novo Nordisk sales representatives gave information to physicians that created the false or misleading impression that the Victoza warning was wrong or unimportant. When a 2011 survey showed that half of primary care doctors polled were unaware of the potential risk, the FDA modified its procedures to increase awareness, but the company’s sales force failed to comply with them, the Justice Department said.

Top Drug

Novo Nordisk shares rose 0.3 percent to 296.60 kroner at 9:12 a.m. in Copenhagen trading. The stock is trading near a one-year high.

The company said in a statement that it takes seriously its responsibility to communicate safety and clinical benefits of its medicines. Victoza, an injection that stimulates the natural production of insulin, is the company’s biggest-selling drug and one of its fastest-growing products.

"While we do not agree with the U.S. government’s legal conclusions and deny any wrongdoing, we’re pleased to have negotiated a resolution that allows the company to return its full attention to developing medicines that help improve the lives of patients,” said Doug Langa, Novo Nordisk’s head of North America operations.

Whistle-Blower Settlement

The settlement includes disgorgement of $12.15 million for alleged violations of the Federal Food, Drug, and Cosmetic Act from 2010 to 2012 and a payment of $46.5 million to settle whistle-blower lawsuits. The court docket initially erroneously showed the U.S. demanding $12.15 billion in its lawsuit.

The diabetes-drug prescriptions tied to Novo Nordisk’s campaign violated U.S. false-claims laws, which prohibit drugmakers from getting insurance reimbursements from federal programs produced by illegal marketing tactics, the whistle-blowers said.

A former Novo Nordisk sales manager and a nurse who was a contractor said the pharmaceutical maker sent salespeople disguised as diabetes educators into doctors’ offices to illegally promote the firm’s medicines, including Victoza.

The case is U.S. v. Novo Nordisk Inc., 17-cv-01820, U.S. District Court, District of Columbia (Washington).

(An earlier version of this story corrected the amount sought by the U.S. in the lawsuit.)

To contact the reporters on this story: David McLaughlin in Washington at dmclaughlin9@bloomberg.net, Andrew Harris in Washington at aharris16@bloomberg.net, Jef Feeley in Wilmington, Delaware at jfeeley@bloomberg.net.

To contact the editors responsible for this story: Heather Smith at hsmith26@bloomberg.net, Joe Schneider, Peter Blumberg