Health Law & Business News

Doc Alleges Novo Nordisk Ran Kickback Scheme for Hemophilia Drug

May 29, 2020, 6:28 PM

Novo Nordisk Inc. orchestrated a kickback and off-label scheme to promote sales of its NovoSeven drug, according to a complaint unsealed by a federal court in Oklahoma.

The whistleblower’s complaint, first filed in 2015 and unsealed Thursday, accuses the company of trying to boost profits for a drug that treats a small subgroup of hemophilia patients by promoting it for off-label uses in a way that downplayed NovoSeven’s safety risks.

The Danish pharmaceutical manufacturer had previously agreed to pay $25 million to resolve its civil liability for illegally promoting off-label use of NovoSeven, according to Department of Justice officials.

Company spokesman Ken Inchausti said the allegations are “without merit and don’t accurately represent Novo Nordisk’s commitment to ethics.”

“We deny these allegations and are prepared to defend our efforts to responsibly support patients and engage with the community of physicians who treat these patients,” Inchausti said in a statement.

The second consolidated complaint, filed May 11, also alleges that Novo Nordisk paid kickbacks to “anyone who could influence” the prescribing habits for the roughly 20% of hemophilia patients who needed this class of drug—including the patient, their family, the physician, and pharmacies.

All of these efforts led to a 140% increase in the drug’s sales from 2000-2008, and about 97% of all in-hospital uses of the drug were off-label by 2008, according to the complaint.

Prophylactic Use Touted

NovoSeven was approved to be taken as needed by a subgroup of hemophilia patients, but the complaint alleges that the company promoted the off-label use of taking the drug daily as a prophylactic. It also alleges the company promoted the off-label use with data that the FDA found was insufficient to approve NovoSeven’s use as a prophylactic.

The complaint alleges that Medicare, Medicaid, and private insurers paid billions of dollars for off-label uses of the drug. That was despite the availability of a competitor’s less-expensive product, which was indicated for prophylactic use and shown to stay in the body longer than NovoSeven, requiring fewer doses.

“It’s an extremely costly drug and off-label marketing and schemes like this drain federal and state health care systems,” said Reuben Guttman, an attorney with Guttman, Buschner & Brooks who is representing the whistleblower bringing the case against Novo Nordisk.

“When the drug industry markets a drug it has an obligation to be truthful and forthcoming about its product because every time a patient ingests a drug there are risks,” he added.

The False Claims Act

Entities violate the False Claims Act when they obtain payment from the federal government based on misrepresentation or fraudulent schemes.

False Claims Act cases are common in the health-care industry where whistleblowers, known as relators, allege fraudulent Medicare claims by doctors or hospitals. Whistleblowers who file a successful lawsuit under the act are entitled to up to 30% of any recovery on the government’s behalf.

In this case, Dr. Jamie Siegel is the relator bringing the case against Novo Nordisk, with Washington state participating as an intervenor. The federal government declined to participate.

Siegel, of Maryland, was a director of hematology in clinical development, medical, and regulatory affairs at Novo Nordisk from 2008-2009.

While the company hired Siegel to work on clinical development, she quickly found Novo Nordisk’s focus was promoting new marketing strategies for NovoSeven rather than new areas for research and trials, according to the complaint.

During her tenure with Novo Nordisk, Siegel was involved in many marketing meetings where strategies were discussed for promoting the drug’s off-label use to pull market share from a competitor that had a more affordable, on-label drug for the same condition.

The relator and intervenor are asking a judge in U.S. District Court for the Western District of Oklahoma to order Novo Nordisk to cease and desist any activity that violates the False Claims Act. They also want the company pay up to $21,563 for each violation of federal law, plus three times the amount of damages to the U.S. government.

The case is Siegel v. Novo Nordisk Inc., W.D. Okla., No. 5:15-cv-00114, second consolidated complaint 5/11/20.

To contact the reporter on this story: Valerie Bauman in Washington at vbauman@bloomberglaw.com

To contact the editors responsible for this story: Fawn Johnson at fjohnson@bloomberglaw.com; Andrew Childers at achilders@bloomberglaw.com

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