After Novo Nordisk allegedly told investors it was resistant to industrywide insulin pricing pressures, some shareholders brought a class action lawsuit claiming they were misled. On Friday in a federal district court in New Jersey, Novo Nordisk agreed to a $100 million settlement with those disgruntled investors.
The Danish drugmaker cut the deal while maintaining that the move was not an admission of wrongdoing. Novo Nordisk said the claims were without merit and that it was settling to “avoid the burden, inherent risk and expense of further litigation,” the Danish diabetes specialist said in a statement.
The deal stems from a 2017 lawsuit filed by purchasers of American Depository Receipts, which are equity securities created to simplify foreign investing for U.S. investors. The plaintiffs had demanded approximately $1.75 billion in compensation for losses incurred from February of 2015 to February of 2017.
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During that period, insulin makers came under fire for their climbing prices, even as sales were falling. For many years, insulin makers have had to compete against one another by offering bigger and bigger rebates.
The dynamic caused patients to pay more for their medicines even as drugmakers reported flat or declining net sales.
In a court filing, plaintiffs said that while other companies told investors that their insulin-related revenues would diminish as a result of pricing pressures, Novo Nordisk executives assured investors that the company was not subject to the same pressures and that its sales and profits would continue to grow.
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The news comes during a year in which Novo Nordisk’s fortunes have risen thanks to its diabetes standouts Ozempic and Rybelsus and excitement over its new drug Wegovy, hailed as a potential game-changer in combatting obesity.