Novo’s been relying less on insulins for growth these days as its GLP-1 franchise steams ahead. But trouble in its insulin franchise still lingers—and now it'll have to defend against a group of investors who sued in Denmark, claiming it made “misleading” statements about its insulin sales.
And the investors want payback—in a big way. They're demanding about $1.75 billion in compensation.
The shareholder lawsuit claims losses from February 2015 to February 2017 based on allegations the company misled the public about its insulin sales in the U.S. The drugmaker said the complaint “appears to contain broadly similar allegations to those of the previously announced securities class-action lawsuit” filed in the U.S. in 2017.
Novo hit back that it “disagrees with the allegations and is prepared to defend the company in this matter.”
Insulin makers have faced years of allegations, criticism and investigations over their prices, even as sales have fallen. In the U.S., list prices have climbed in recent years, as have rebates to pharma middlemen. That dynamic has led patients to pay more for their medicines, while drugmakers have reported flat or declining net sales.
A group of Novo investors sued the drugmaker back in early 2017 alleging the company “misrepresented and concealed the true extent” of insulin pricing pressure from payers. Aside from investor suits, states have sued insulin makers for violations of consumer protection laws and deceptive pricing.
Amid its insulin pricing squeeze, Novo has pivoted toward its GLP-1 franchise, hoping to rely less on the insulins for growth. In the first half of the year, the company's group of GLP-1 diabetes and obesity meds fueled growth at the drugmaker, bringing in $2.63 billion, a 29% increase. The company also hopes to win a highly anticipated approval for oral semaglutide yet this year.