Novo Settles US Probe

Novo Settles US Probe

It seems like Sanofi (NYSE: SNY) isn’t the only company that has been accused of illegal activities related to their diabetes franchise. Per a story posted on the Bloomberg web site;

“Novo Nordisk A/S has agreed to settle a U.S. probe of its marketing of diabetes drugs that allegedly included disguising salespeople as medical educators and paying kickbacks to persuade doctors to prescribe its medicines. The allegations were disclosed when a whistle-blower lawsuit was unsealed by a judge.”

The full story can be read at https://www.bloomberg.com/news/articles/2017-04-28/novo-nordisk-is-sued-over-diabetes-drug-sales-practices

Now we would like to say we are shocked by this news but frankly we aren’t. As much as we hate to say this marketing and sales shenanigans are commonplace in this wacky world. Many of these practices are well known yet go unreported for one of two reasons; whistle-blower’s share in any settlements and therefore do not go public and none whistle-blowers won’t go on the record.

Unlike other media outlets Diabetic Investor will not make any accusations or assertions without fully investigating. Nor would we write about such illegal practices unless someone was willing to go on the record. Yes, we have and will continue to use unnamed sources but not when it comes to something as serious as illegal activities we draw the line.

Many times, we have stated that there are times when the business of diabetes interferes with treating diabetes. That due to business reasons physicians are not allowed to treat patients as they would like. That due to business reasons some patients are not able to use the drugs they need because they are not on formulary. In other instances, patients are forced to pay out of pocket for life saving drugs like insulin because due to business reasons they have a high deductible plan.

Listen Diabetic Investor was not born yesterday and we understand the sales process. We understand that sales reps will do whatever they can to maximize their compensation. This as we like to say is the nature of the beast. We are also aware that some sales reps do and have crossed the line, this too is the nature of the beast. As the old saying goes one rotten apple can spoil the whole basket of apples.

The irony here is that many in the industry are aware of what’s going yet turn a blind eye and do not report illegal activities. Sure, behind the scenes they will complain loudly but ask them to go on the record and expose these activities they suddenly clam up. Some just chalk this up as the cost of doing business something they would rather not deal with but do deal with. We also suspect another reason for their silence is perhaps their own company is less than honest, that they too may be as many like to say are playing the game.

Now we’re sure many will use this settlement as another reason to paint all pharmaceutical companies as the evil empire. Nothing but a bunch of money grubbing companies who care only about making a buck and care nothing about patients. That all these executives are making millions while patients are struggling to pay for the drugs they need. And quite frankly given the many examples of this we cannot blame people for feeling this way.

We have spent a great deal of time, too much time, writing about highly compensated executives who have done nothing but lose money for investors yet receive very fat bonuses while they are laying off employees. Executives who get paid very handsomely and run companies into the ground. Executives who are just recycled, rehired somewhere else who then do the same exact thing.

And how many times have we written and warned investors to stay away from companies that have nothing but a pretty PowerPoint presentation. How many times have we stated that a little due diligence goes a long way.

Listen we know many won’t like to hear this but this is how the real world operates. Sure, it would be nice if everyone played by the same rules and no one broke the rules. But this also a fantasy. Perhaps this is another reason these people won’t go on the record as they believe even when they do the right thing nothing changes. And to a certain extent we do understand this belief. However, this does not in the end excuse their silence.

As Momma Kliff used to say; “Besides two wrongs not making a right. Silence in the face of injustice is as criminal as the injustice itself.”