The details are slim, but Novo Nordisk seems to be in the clear after shareholders took the diabetes juggernaut to court nearly three years ago over the company’s public communications about its struggling insulin business.
Novo Nordisk said Friday that it’s settled a Danish securities lawsuit from the summer of 2019. The agreement “contains no admission of liability, wrongdoing or responsibility by Novo Nordisk,” and the company won’t make any payments to plaintiffs, the company said in a release.
Novo investors sued in Denmark in August 2019, alleging the company made “misleading statements and did not make appropriate disclosures regarding its sales of insulin products in the US,” Novo said. The original claim demanded Novo Nordisk pay 11.78 billion Danish krone (about $1.8 billion) in compensation. In response, the company said it disagreed with the allegations and was ready to defend itself.
At the time, Novo Nordisk said the complaint appeared to cover “broadly similar allegations” to those of a U.S. securities lawsuit from 2017. Last September, the company settled that case for $100 million in a deal that featured no admission of wrongdoing.
In the 2017 lawsuit, a group of Novo Nordisk shareholders sued the drugmaker over allegations that it “misrepresented and concealed the true extent” of insulin pricing pressure from U.S. payers. That investor revolt is one of many examples of the allegations, criticism and investigations insulin makers have faced over the costs of their meds.
As recently as December, Novo Nordisk was implicated alongside drugmakers Sanofi, Eli Lilly and Pfizer in a House Oversight Committee probe, which concluded after nearly three years that pharma companies have targeted “weaknesses” in the U.S. healthcare system to profit off of older drugs.
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The lawmakers argued that Medicare, had it been able to negotiate drug prices, could have saved more than $16.7 billion between 2011 and 2017 on purchases of the insulin products Humalog, Lantus and NovoLog, made by Lilly, Sanofi and Novo, respectively.
Novo Nordisk did not immediately reply to a request for comment on Friday’s settlement announcement.
Amid insulin pricing pressures in recent years, Novo Nordisk has turned to its GLP-1 franchise for growth. In 2020, the company rolled out an oral version of its type 2 diabetes med Ozempic dubbed Rybelsus. In 2021, the company launched obesity medicine Wegovy.
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All told, Novo’s weight loss drugs generated 5.94 billion Danish krone (about $910 million) in the first nine months of 2021. The company’s GLP-1 franchise for diabetes contributed 37.22 billion Danish krone ($5.7 billion) in sales during that time.
