A pharmaceutical company accused of downplaying the potential cancer risk of a best-selling diabetes drug will pay about $60 million to settle lawsuits, the U.S. Justice Department has announced.
Novo Nordisk was supposed to make sure that physicians and patients knew that its drug Victoza had an unknown risk of a certain type of thyroid cancer.
Instead, the government alleged, Novo Nordisk trained its sales force to mislead doctors by conveying the impression that the "black box warning" that it was required to place on the drug was erroneous, irrelevant or unimportant.
That put vulnerable patients at risk, the government's complaint alleged.
The federal settlement dismisses other claims made in seven whistleblower lawsuits against the company involving the drug, including an allegation by a former Novo Nordisk sales representative who marketed the drug in Georgia and South Carolina.
From its launch in 2010, Peter Dastous alleged in his lawsuit, the company promoted Victoza for treatment of diabetes in children even though the drug had been approved only for adult diabetics. It has not been found safe and effective for children with diabetes.
By promoting the drug for what he called "blatantly off-label" purposes and by downplaying the black box warning, Dastous accused the company of defrauding government programs, such as Medicaid, that paid for prescriptions. He also said it defrauded private insurers in California and Illinois by promoting off-label uses of the drug.
Dastous, who no longer works for Novo Nordisk, could not be reached for comment.
Settlement of the federal lawsuit calls for the company to pay $58.65 million to the federal government. Settlement of separate whistleblower cases alleging fraud against private insurers also calls for the company to pay $1.1 million to California and $250,000 to Illinois.
Dastous received a share of the awards in the two state cases. The share of an award on the federal case has not yet been determined for any of the whistleblowers, an attorney for Dastous told The Atlanta Journal-Constitution.
The Justice Department declined to intervene on other claims the whistleblowers made.
Novo Nordisk released a statement saying that it remains committed to properly addressing safety questions posed by healthcare professionals. "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 the statement by Doug Langa, who heads the company's North American operations.
Earlier this year, the company settled a separate lawsuit alleging the company skirted federal rules to promote Victoza and two other diabetes medications. The scheme reportedly involved disguising sales people as medical educators, Bloomberg News reported.