JURY REJECTS CLAIMS THAT NOVO NORDISK DEFRAUDED WASHINGTON MEDICAID PROGRAM

Pharmaceutical giant Novo Nordisk has prevailed in a high-stakes legal battle after a jury dismissed claims that the company defrauded Washington state’s Medicaid program through improper billing practices related to its hemophilia treatment, NovoSeven.

Following a comprehensive 15-day trial, jurors determined on November 7 that neither the government nor whistleblower Jamie Siegel had sufficiently demonstrated violations of the False Claims Act, according to the judgment on jury verdict.

The case, initially filed in 2015 in the U.S. District Court for the Western District of Washington, centered on allegations that the Danish drugmaker had engaged in improper marketing practices for NovoSeven, a medication primarily used to treat bleeding episodes in hemophilia patients with inhibitors.

Siegel’s complaint alleged that Novo Nordisk had actively promoted NovoSeven for off-label uses not approved by the Food and Drug Administration, including prophylactic treatment and dosages exceeding FDA-approved amounts. The whistleblower further claimed that the company provided kickbacks to physicians as incentives to prescribe the medication, potentially violating federal anti-kickback statutes.

Healthcare fraud cases involving pharmaceutical companies have become increasingly common in recent years, with the federal government recovering billions of dollars through False Claims Act litigation. Such cases typically involve allegations that drugmakers caused the submission of false claims to government healthcare programs through marketing misconduct, kickbacks, or price reporting violations.

NovoSeven, which contains the active ingredient recombinant factor VIIa, is one of several specialized clotting factor products available for hemophilia patients. The medication can cost tens of thousands of dollars per dose, making hemophilia treatments among the most expensive in the U.S. healthcare system and raising their profile for potential fraud investigations.

The victory represents a significant legal win for Novo Nordisk, which has established itself as a dominant player in the global pharmaceutical industry. While best known for its diabetes and weight loss medications like Ozempic and Wegovy, the company maintains a diverse portfolio that includes treatments for rare bleeding disorders.

Had the jury ruled against Novo Nordisk, the company could have faced substantial financial penalties. Under the False Claims Act, defendants found liable can be ordered to pay triple damages plus additional civil penalties for each false claim submitted to government healthcare programs.

Whistleblowers like Siegel, known as “relators” in legal terminology, typically receive between 15% and 30% of any recovery if the government intervenes in the case, or higher percentages if they proceed independently. The financial incentives built into the False Claims Act have made it a powerful tool for identifying and prosecuting healthcare fraud.

The pharmaceutical industry has faced increasing scrutiny over marketing practices in recent decades, with numerous companies settling allegations of off-label promotion and kickback schemes. Notable settlements have included Pfizer’s $2.3 billion agreement in 2009 and GlaxoSmithKline’s $3 billion settlement in 2012.

Neither Novo Nordisk nor attorneys for Siegel have issued public statements regarding the verdict. The company’s shares were relatively unaffected by the news, reflecting the limited financial implications of the case compared to the company’s overall market position.

Novo Nordisk continues to experience remarkable growth driven primarily by its GLP-1 medications for diabetes and obesity, with its market capitalization recently surpassing $500 billion. The company has become Europe’s most valuable publicly traded entity, highlighting how this legal victory, while significant, represents just one facet of the pharmaceutical powerhouse’s operations.

Healthcare fraud experts note that despite this victory, the pharmaceutical industry will likely continue facing whistleblower claims and government investigations as regulators work to control healthcare costs and ensure compliance with marketing regulations.