Novo Nordisk Pays $1.725 Million to Resolve Claims That its Sales Representatives Paid Pharmacists for Access to Confidential Patient Information

Novo Nordisk, Inc. has entered into a civil settlement agreement with the United States in which it has agreed to pay the United States and several states $1.725 million to resolve allegations that the company caused false or fraudulent claims to be submitted to the Medicaid program in connection with its marketing of the diabetes drugs Novolin, Novolin 70/30, Novolog, and Novolog 70/30.

The settlement was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York.

As alleged in the civil settlement agreement, Novo Nordisk sales representatives in four states and the District of Columbia made payments to Rite Aid pharmacists in exchange for those pharmacists recommending the Novolin and Novolog products. The pharmacists, together with Novo Nordisk sales representatives in those states, identified patients who were candidates to use Novolin or Novolog and communicated with physicians, patients, or other pharmacists to encourage them to use or recommend the use of those drugs. As part of these activities, the pharmacists accessed, or allowed Novo Nordisk representatives to access, confidential patient information, which was used for the purpose of conducting marketing events that were designed to switch patients from competitor diabetes drugs to Novolin or Novolog.

In addition to entering into the federal settlement and agreeing to enter into settlement agreements with the states, Novo Nordisk, which has not admitted to engaging in the conduct at issue, has also entered into a Corporate Integrity Agreement with the Department of Health and Human Services, Office of Inspector General.

The investigation that lead to the settlement began after a former Novo Nordisk sales representative filed a complaint against the company on behalf of the United States in the Eastern District of New York. Under the federal False Claims Act, a private individual who has uncovered fraud against the federal government may file a suit in federal court on behalf of the United States. If the United States is successful in resolving those claims, the individual who filed the complaint may receive a share of the recovery.

“We are committed to battling health care fraud, especially when money is exchanged in an attempt to impact treatment decisions,” stated United States Attorney Lynch. “The allegations in this case were particularly egregious because they involved the disclosure of confidential patient information.”

“When pharmaceutical companies pay kickbacks – as Novo Nordisk is alleged to have done – it is especially insidious because patients may not be receiving untainted medical advice,” said Tom O’Donnell, Special Agent-in-Charge of New York’s Office of the Inspector General for the Department of Health and Human Services. “When those in the health care industry insist on misusing private patient health information at taxpayer expense, they should not be surprised when they are held accountable for their actions.”

Janice K. Fedarcyk, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Filed Office, stated, “Those in the health care industry are entrusted with the responsibility of protecting confidential patient health information. The exploitation of that confidential information for increased profits turns taxpayers and customers into unwitting victims.”

The government’s case was handled by Assistant U.S. Attorneys Paul Kaufman and James Cho, and Rebecca Ford of the Department of Justice’s Civil Frauds Branch, who were assisted by Affirmative Civil Enforcement auditor Emily Rosenthal. The Corporate Integrity Agreement was negotiated by Mary Riordan and Keshia B. Thompson, Senior Counsel of the Office of Counsel to the Inspector General of the U.S. Department of Health and Human Services. The model state settlement agreement was negotiated by Lelia P. Winget-Hernandez of the Virginia Attorney General’s Office.