Whistleblower recoveries from insurance cases brought by Phillips & Cohen bring Novo Nordisk’s Victoza settlement to $60 million

WASHINGTON, DC, September 5, 2017 – A whistleblower lawsuit filed by Phillips & Cohen LLP in 2010 against Novo Nordisk alleging illegal marketing, promotion and sale of its best-selling diabetes drug, Victoza, has been resolved as part of the pharmaceutical company’s $58.65 million settlement with the federal government announced today for alleged healthcare fraud and Federal Food, Drug, and Cosmetic Act violations.

In addition, Novo Nordisk has agreed to pay $1.1 million to the state of California and $350,000 to the state of Illinois to settle separate whistleblower cases brought by Phillips & Cohen alleging fraud against private commercial health insurers.

Those state settlements bring the total that Novo Nordisk will pay to $60 million – including $48 million to settle allegations of illegal marketing, promotion and sale of Victoza from 2010 to 2014, in violation of the False Claims Act. Both California and Illinois will receive more funds from the state whistleblower insurance cases than they will from the Medicare and Medicaid settlement, which allots those states $84,000 and $26,000, respectively.

“Novo Nordisk was able to greatly increase its revenues as a result of the alleged ‘off-label’ marketing of Victoza that encouraged doctors to prescribe it for unapproved uses,” said Erika Kelton, a whistleblower attorney with Phillips & Cohen, who worked on the case. “Victoza is an expensive drug with serious potential side effects that should be used only for certain approved treatments.”

Phillips & Cohen’s federal “qui tam” (whistleblower) case brought under the False Claims Act is one of seven “qui tam” lawsuits filed by 11 whistleblowers between 2010 and 2016 that have been resolved under the federal settlement agreement. Most of the lawsuits, including Phillips & Cohen’s, were “under seal” and not publicly known until today when the court unsealed all of them.

“The large number of individuals who filed whistleblower lawsuits against Novo Nordisk for its marketing of Victoza shows how widespread and concerning the alleged marketing practices were,” Kelton noted.

Phillips & Cohen’s client, Peter Dastous, was a Novo Nordisk sales representative who was responsible for selling Victoza to endocrinologists in South Carolina and northern Georgia.

His lawsuit alleges that Novo Nordisk launched an extensive campaign to promote Victoza for off-label uses, which had not been approved by the US Food and Drug Administration. These uses included treatment of weight loss in patients with all types of diabetes or who were pre-diabetic, even though the FDA had approved it to treat only patients with Type 2 diabetes.

Phillips & Cohen’s complaint alleged that Novo Nordisk’s off-label promotional practices included publishing and disseminating through favorable articles in medical journals claims that Victoza is effective for weight loss. Sales representatives allegedly then elicited requests for copies of those articles from doctors.

The settlement with the federal government covered allegations that Novo Nordisk trained sales representatives to provide to doctors misleading information about Victoza that downplayed the health risks.

At the time the Phillips & Cohen complaint was filed, Victoza cost roughly $300 to $400 per month, depending on the dose. The alleged off-label marketing unnecessarily increased the costs for government healthcare programs while allegedly endangering patients, according to the whistleblower complaints and the government.

California and Illinois whistleblower laws used to recover funds for losses to private insurers

Phillips & Cohen also used little-known California and Illinois state insurance laws to recover funds linked to alleged losses of private insurers from the alleged off-label marketing of Victoza. The California Insurance Fraud Prevention Act and the Illinois Insurance Claims Fraud Prevention Act allow whistleblowers to sue and recover funds from entities that defraud private insurers, including health insurers.

The recoveries under the state fraud insurance laws are separate from the recoveries the states will receive under their false claims statutes for Medicaid losses. Whistleblowers are entitled under the state statutes to a share of the recoveries based on the information and assistance they and their lawyers provided, as they are under the False Claims Act.

The state “private-insurance” whistleblower laws are designed to protect the public from premium increases and coverage limits caused by large insurance-fraud losses, including losses from healthcare schemes.

“Recoveries for private insurers under state whistleblower laws are relatively infrequent,” said Larry Zoglin, a whistleblower attorney at Phillips & Cohen. “California and Illinois are the only states with laws that encourage whistleblowers to expose fraud against private insurers and reward the whistleblowers for doing so.”

Attorney Kelton thanked the federal and state government attorneys for their efforts. “We appreciate the work on this case by federal and state attorneys and the support we received from the office of California Insurance Commissioner Dave Jones,” Kelton said.

Federal case citation: US, et al. ex rel. Dastous v. Novo Nordisk, Inc., Civ. Action No. 11-01662 (D.D.C.)

For more information on the settlements, see:

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