DENMARK – Novo Nordisk has reached an agreement with several Danish shareholders in relation to a securities lawsuit filed against it in 2019.
The investors accused the company of making misleading statements about its US insulin business and sought DKK 11.8 billion (US$1.8 billion) in compensation based on company share trading over a two-year period beginning in February 2015.
A group of Novo Nordisk shareholders sued the drugmaker in 2017 on the grounds that it “misrepresented and concealed the true extent” of insulin pricing pressure from U.S. payers.
This investor revolt is just one of many allegations, criticisms, and investigations that insulin manufacturers have faced regarding the costs of their medications.
Even as recently as December, Novo Nordisk was named alongside drugmakers Sanofi, Eli Lilly, and Pfizer in a House Oversight Committee investigation that concluded, after nearly three years, that pharma companies exploited “weaknesses” in the US healthcare system to profit from older drugs.
The Danish drugmaker said in a statement that the settlement contains “no admission of liability, wrongdoing, or responsibility by Novo Nordisk, and no payment will be made by Novo Nordisk to the plaintiffs.”
The suit claimed that Novo Nordisk “did not make appropriate disclosures” about its insulin product sales in the United States, and that it had maintained inflated long-term revenue projections for the company.
At the time, Thomas Ryhl, a lawyer representing several pension funds involved in the legal action, claimed that Novo Nordisk was not immediately forthcoming about its increased revenue in the US.
Ryhl claims that when the company did come clean, he was shocked “It’s too late. What they said in 2016 should have been said in 2014 and 2015.”
Novo Nordisk’s US insulin revenues increased between 2015 and 2017, according to Ryhl, but so did rebates to pharmacy benefit managers. As a result, insulin profits fell, according to Ryhl.
Meanwhile, Novo Nordisk recently forecasted that its sales growth would slow by about 3% this year due to lower prices and lower insulin sales volumes in China.
Except for Ryzodeg and Xultophy, all of the company’s insulins were included in China’s volume-based procurement tender, according to the company.
In recent years, as insulin prices have risen, Novo Nordisk has shifted its focus to its GLP-1 franchise for growth.
In 2020, the company will launch Rybelsus, an oral version of its Type 2 diabetes medication Ozempic. Wegovy, an obesity medicine, was launched by the company in 2021.
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