Novo Nordisk pays $59M to settle allegations it downplayed drug's cancer risk

Drug manufacturer Novo Nordisk will pay $58.7 million to resolve allegations that the company misled physicians and patients by downplaying the cancer risk of its diabetes medication Victoza.

The settlement addresses claims that Novo did not comply with safety communications required by the federal Food and Drug Administration Risk Evaluation and Mitigation Strategies law.

The company will pay $46.5 million for allegedly violating the False Claims Act through marketing schemes that corrupted physicians' medical judgment, unlawfully increased costs of prescription drugs and risked patients' lives, according to a complaint filed in federal court. It will also pay $12.2 million for alleged violations of the Federal Food, Drug, and Cosmetic Act.

Novo Nordisk said it denies any wrongdoing, but is pleased with the result.

The case sets the precedent that the False Claims Act can be used to punish drug companies that use slick marketing tactics to avoid drug safety warnings as required by REMS, said attorney Ann Lugbill of Murphy Anderson, the law firm that filed the complaint.

"Had REMS' drug safety scheme been in place in the 1990s when opiate painkillers were marketed as safe and effective, our current heroin epidemic might not exist," she said.

As alleged in the complaint, Novo's diabetes drug Victoza potentially causes a rare form of cancer called medullary thyroid carcinoma, which its sales representatives were allegedly told to minimize. The company allegedly encouraged its sales reps to quickly state the warnings, address them with physicians and move on to other marketing statements about Victoza's efficacy, "because efficacy sells," the complaint said.

Sales reps also allegedly hyped up the potential weight loss side effect of Victoza even though the FDA did not approve that use, according to the complaint. Novo allegedly marketed the drug to patients who were not diabetic and to doctors at weight-loss clinics that didn't treat diabetes. It also lured medical professionals to promote the drug via lucrative speaking engagements, the complaint said.

The federal government will receive $43.1 million and state Medicaid programs will receive $3.3 million.

"We have sent a strong signal to the drug industry," U.S. Attorney for the District of Columbia Channing Phillips said in a statement.