Drug Manufacturer Novo Nordisk, Inc. Agrees to pay $58 million to Resolve Allegations that it Violated the False Claims Act and that it also Failed to Comply with FDA-mandated Regulations
When pharmaceutical companies violate the law they endanger millions of Americans and lessen the effectiveness of prescribing physicians. This was the case when last week the Justice Department announced that Pharmaceutical Manufacturer Novo Nordisk Inc. has agreed to pay the government $58.65 million to resolve allegations that it failed to comply with the FDA-mandated Risk Evaluation and Mitigation Strategy (REMS) for its Type II diabetes medication – Victoza. The settlement includes $12.15 million for alleged violations of the Federal Food, Drug, and Cosmetic Act (FDCA) and a $46.5 million payment for alleged violations of the False Claims Act (FCA). Novo Nordisk, Inc. is alleged to have committed these violations from 2010 – 2014. “Today’s resolution demonstrates the Department of Justice’s continued commitment to ensuring that drug manufacturers comply with the law,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division. “When a drug manufacturer fails to share accurate risk information with doctors and patients, it deprives physicians of information vital to medical decision-making.”
In a civil complaint filed in the U.S. District Court for the District of Columbia last week, the government alleges that the FDCA required Novo Nordisk, Inc. to have its drug Victoza follow a REMS to mitigate the potential risk of a rare form of cancer called Medullary Thyroid Carcinoma (MTC) associated with the drug. The REMS required Novo Nordisk, Inc. to inform physicians of the potential risks of MTC. Failing to do so renders a drug misbranded under the law. Moreover, the government alleges that some of Novo Nordisk’s sales representatives lead physicians to believe that the Victoza REMS-required message they received was erroneous, irrelevant, or unimportant. This in turn led some physicians to be unaware of the potential risk posed by Victoza when prescribing the drug. These actions violated provisions of the FDCA.
Finally, a 2011 survey showed that half of the primary care doctors polled were unaware of the risk posed by Victoza and its association with MTC. Rather than implementing a modification the government made to increase awareness of the potential risk of MTC, Novo Nordisk, Inc. instructed its sales force to provide physicians with information that obscured the risk information. As part of the settlement, Novo Nordisk, Inc. has agreed to disgorge $12.15 million in profits it derived from its illegal conduct. “Novo Nordisk Inc. sales representatives misled physicians by failing to accurately disclose a potential life threatening side effect of a prescription drug, and needlessly increased risks to patients being treated with this drug,” said Assistant Director in Charge Andrew W. Vale of the FBI’s Washington Field Office. “The FBI is committed to ensuring that the private industry provides honest and accurate risk information to the public and will continue to work closely with our law enforcement partners to investigate companies who do not comply with FDA-mandated policies.”
Novo Nordisk is committed to paying an additional $46.5 million to the federal government and the states to resolve claims under the FCA and state false claim acts. Novo Nordisk is alleged to have caused false claims to be submitted from 2010 to 2014. 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. As a result of today’s FCA settlement, the federal government will receive $43,129,026 and state Medicaid programs will receive $3,320,963. The Medicaid program is funded jointly by the state and federal governments.