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DOJ Intervenes, Settles Novo Nordisk Whistleblower Case

Novo Nordisk to Repay $25 Million in False Claims

BALTIMORE — June 10, 2011 —  A false claims case against global pharmaceutical firm Novo Nordisk came to a close today with the announcement of a $25 million settlement. According to the complaint, filed under seal by the law firm of Wates & Kraus, LLP and co-counsel, Hargrove & Rea, in October 2008, the company’s methodical and aggressive promotion of an expensive hemophilia drug for unapproved uses not only subjected soldiers and civilians to potentially deadly side effects, but it also cost the government millions in false reimbursement claims.

Novo Nordisk has agreed to repay approximately $25 million to the government for violations of the False Claims Act. Together, the whistleblowers in the case, former active-duty Army physician Ian Black and former Novo Nordisk medical science liaison Oscar Montiel, will be awarded 16.7 percent of the total recovery amount.

Sold under the trade name NovoSeven, the drug in question was approved by the FDA in 1999 to treat and prevent bleeding episodes among patients with hemophilia who have an immunity to the blood-clotting proteins found in more commonly used hemophilia drugs. While unapproved, or “off-label,” use of drugs is not uncommon, court documents showed that from roughly 2005 until at least 2008, Novo Nordisk aggressively promoted NovoSeven among military and civilian physicians, providing unrestricted grant funds, speaker’s fees and other kickbacks to encourage doctors to publicly support its use in trauma units to control bleeding among nonhemophiliac patients. Because Medicare, Medicaid, TRICARE, and the Department of Veterans Affairs are not authorized to pay for or reimburse for off-label use, Novo Nordisk’s unlawful promotional tactics led to the payment of false claims.

According to Loren Jacobson, a partner with the plaintiffs’ firm of Waters & Kraus, Dr. Black became uncomfortable with the frequency of the drug’s use while serving in a combat hospital in Iraq as an anesthesiologist. The drug was widely used in Iraq and Afghanistan, and was even incorporated into Army protocols, called clinical practice guidelines. Once the drug began to be used widely in the Army, Novo Nordisk began to use that as a selling point to civilian physicians for use in trauma units across the country.

“Army protocols recommended the use of NovoSeven for almost all trauma —  recommending its use early and often, “Ms. Jacobson said. “Dr. Black and other physicians attempted to rewrite the clinical practice guidelines. He didn’t say ‘don’t use it at all,’ but he tried to cub its use.”

Dr. Black advocated that NovoSeven be conservatively used. He encountered resistance from some quarters of the Army when he attempted to curb the military’s uses of NovoSeven. Dr. Black was invited to engage in research and was offered honoraria and other kickbacks to persuade him to support off-label use of NovoSeven.

“Ultimately, his recourse was to bring this case on behalf of the United States government, which has gone a long way to correcting the situation,” said co-counsel Dan Hargrove of Hargrove & Rea. “He hopes that he was able to shed light on these practices and highlight the consequences of the off-label uses of the drug.” Dr. Black, who serves as an Army reservist, said, “This does not change how I feel about military medicine. I am proud of the care given to those in harm’s way and I am proud of the way the system responded to new data.”

Drawing upon Dr. Black’s insights as an Army physician, along with Mr. Montiel’s firsthand accounts of sales and marketing practices, the complaint outlined aggressive tactics specifically designed to prompt physician inquiries regarding off-label use and cultivate support among ” key opinion leaders” in both military and civilian physician communities. The complaint also stated that Novo Nordisk funneled money through nonprofit foundations in order to couch indirect payments as educational grants.

“The company was doing everything it could to expand the usage of the drug,” explained Ms. Jacobson. “And the worst part is that all of the evidence shows that it does not save lives, and it actually has led to deaths. In this case, the company put profit over lives.”

Despite mounting evidence pointing toward higher rates of stroke and heart attack, Novo Nordisk continued marketing NovoSeven for off-label use, growing its annual in-hospital usage from 125 cases in 2000 to 17,813 in 2008. According to the National Institute of Health, about 18,000 hemophiliacs reside in the United States. Of these, only a small percentage require the specialized formulation of NovoSeven, which ranges in price from $2,000 to $10,000 per vial. Global sales of NovoSeven totaled more than $1.4 billion in 2010 alone.

“This is a significant case, because it involves the corruption of a very important institution,” said Mr. Hargrove. “Oftentimes in off-label cases, you don’t have patient harm. In this case, you not only have harm to the integrity of the Army, but you also have harm to our soldiers —  our nation’s finest. And they deserve better.”

About Waters & Kraus
Waters & Kraus, LLP, is a nationally recognized plaintiffs’ firm concentrating on complex product liability and personal injury/wrongful death cases. The firm’s diverse practice includes qui tam (whistleblower) cases, toxic tort litigation (mesothelioma-asbestos), and pharmaceutical and medical product liability litigation. With offices in Texas, California, and Maryland, Waters & Kraus has litigated cases in jurisdictions across the United States on behalf of individuals from all 50 states, as well as foreign governments.

About Dan Hargrove
Dan Hargrove is a former active duty Army officer, who served with the 10th Mountain Division (Light Infantry) and deployed to the Middle East with the 82nd Airborne Division. He prosecutes health care fraud cases. His blog is GovtFraudLawyer.blogspot.com.

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