Danish drugmaker Novo Nordisk will pay $25 million to settle a lawsuit over the alleged improper marketing of its anti-clotting medicine NovoSeven.
The company said on Friday that it will pay the U.S. government $25 million to resolve a Department of Justice investigation into whether it improperly promoted bleeding-disorder drug NovoSeven for off-label uses not approved by U.S. drug regulators.
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It also reached a $1.725 million deal with the U.S. Attorney in Brooklyn addressing allegations that sales representatives in four U.S. states and the District of Columbia paid pharmacists at drugstore chain Rite Aid to recommend Novolin and Novolog, used to treat diabetes.
Novo Nordisk did not admit wrongdoing in either settlement.
"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 U.S. Department of Health and Human Services.
According to a 2005 whistleblower complaint filed in Brooklyn federal court, Novo Nordisk sales representatives paid pharmacists to get access to confidential information and help identify patients who were candidates for Novolin or Novolog.
The pharmacists then recommended or encouraged use of the Novo Nordisk drugs, according to federal prosecutors.
In addition to its settlement with the U.S. government, Novo Nordisk said it would enter a five-year corporate integrity agreement with the Health and Human Services department. The deal calls for the company to revise its internal compliance guidelines.
"With this settlement, we avoid the distraction and costs of a lengthy legal battle, which would not have been in the best interest of the company or its stakeholders," Jim Shehan, U.S. general counsel for Novo Nordisk, said in a statement.
NovoSeven is approved in the United States for treatment of bleeding episodes in patients suffering from certain rare bleeding disorders. The complaint said the company's U.S. affiliate improperly promoted NovoSeven for unapproved uses.
The company said the settlements would not have any impact on its financial forecasts. (Reporting by Jessica Dye. Editing by Erica Billingham and Robert MacMillan)