AUTH/3173/3/19 - Anonymous v Novo Nordisk

Promotion of Saxenda and conduct of a representative

  • Received
    18 March 2019
  • Case number
    AUTH/3173/3/19
  • Applicable Code year
    2016
  • Completed
    14 October 2019
  • No breach Clause(s)
  • Breach Clause(s)
  • Sanctions applied
    Undertaking received
  • Additional sanctions
  • Appeal
    No appeal
  • Review
    To be published in the November 2019 Review

Case Summary

An anonymous, contactable health professional complained about Novo Nordisk and its employees with regard to alleged insider trading and promoting and selling Novo Nordisk’s weight-loss prescription only medicine, Saxenda (liraglutide), directly to the public.

The complainant stated that a pharmaceutical wholesale company recently approached him/her through his/her clinic, not realising that he/she had his/her own partnership in a wholesale company. The wholesale company had been trying to poach some of the complainant’s established customers who provided aesthetics and slimming services. The complainant stated that an investigation uncovered some very disturbing matters. In summary there were three issues. Firstly, that Novo Nordisk was directly funding companies which advertised, distributed and sold Saxenda directly to the public. Secondly, that at least one Novo Nordisk employee was the owner of, a major shareholder of, and affiliated to, a number of such companies, ie promoting, selling, suppling aesthetic products as well as the slimming pens Saxenda directly to the public, as well as supplying software to such clinics. Thirdly, Novo Nordisk, which must know of these activities, supported some private companies (mainly those its employee had shares in), putting other companies like those of the complainant at a competitive disadvantage.

The complainant provided detailed information about various companies and named individuals.

The detailed response from Novo Nordisk is given below.

The Panel noted the allegations with regard to insider trading and putting other companies at a competitive disadvantage. Whilst the Code did not explicitly refer to such matters, it required that pharmaceutical companies must comply with all applicable codes, laws and regulations to which they were subject. The Panel noted from the evidence before it that there did not appear to have been any formal finding by any judicial authority, or appropriate body formally charged with determining matters in relation to insider trading or competition law, that Novo Nordisk had not complied with the relevant laws and regulations. The Panel therefore ruled no breach of the Code.

The Panel noted the allegations that Novo Nordisk was directly funding companies which advertised, distributed and sold Saxenda directly to the public and that at least one Novo Nordisk employee was owner, major shareholder of and affiliated to a number of such companies.

The Panel noted Novo Nordisk’s submission that it only supplied Saxenda to one named wholesaler and did not and could not have any influence over the supply chain beyond the wholesaler who then sold Saxenda to various entities including distributors.

The Panel noted Novo Nordisk’s submission that its investigation into the complaint had identified that one of its representatives named by the complainant, was a shareholder in a distributor (named). The Panel noted that according to Novo Nordisk, the representative had explained that he/she used to work at the distributor before joining Novo Nordisk and had taken action to alleviate the risk of any conflict of interest, had no day-to-day involvement with the distributor and had not had any involvement with it for years. The Panel noted its comments above about Novo Nordisk’s lack of influence upon the supply chain and the company’s submission that it had not had any business dealings with the named distributor. The Panel did not consider that there was any evidence before it to show that Novo Nordisk had any role in relation to the activities of the named distributor or that it was aware of, had directed or otherwise acquiesced to the conduct of its representative in relation to the matters alleged. Novo Nordisk had not failed to maintain high standards in this regard and the Panel ruled no breach of the Code.

The Panel noted that the representative was listed as a company director and shareholder of a second named company. The representative’s family members were also shareholders, as was a second Novo Nordisk representative. Neither representative had disclosed their interests in this company to Novo Nordisk. The Panel noted Novo Nordisk’s submission about the nature of this company and that Novo Nordisk had no record of this company selling Saxenda or otherwise having any connection to Novo Nordisk. The Panel considered that there was no evidence before it that Novo Nordisk had any involvement with this company including the provision of software or education as alleged. The Panel therefore ruled no breach of the Code in this regard.

The Panel noted the allegation of promotion to the public and that the complaint referred to two further companies in this regard. The Panel noted Novo Nordisk’s submission that none of the shareholders or directors of these two companies were Novo Nordisk employees. The Panel noted that the complainant was concerned that the websites associated with these two companies were selling Saxenda online without the necessary checks. The Panel considered that it had no evidence before it that Novo Nordisk was in any way involved with the online sales of Saxenda to the public by either company and consequently ruled no breach of the Code.

With regard to the allegation that one of these companies claimed to be set-up and fully supported by Novo Nordisk and its representative, the Panel noted Novo Nordisk’s submission that this was not so. The Panel noted that in the interests of transparency Novo Nordisk disclosed that it had sponsored three educational meetings for a named company registered to the same address. The Panel did not consider that Novo Nordisk’s interactions in this regard were within the scope of the complaint and there was no evidence that a Novo Nordisk representative had any connection with the company. The Panel did not consider that there was any evidence before it to show that Novo Nordisk had any role in relation to the alleged activities of the named company. The Panel ruled no breach of the Code.

The Panel noted Novo Nordisk’s submission that the representative did not regard his/her involvement with the distributor as a conflict of interest and therefore never disclosed it to his/her manager or to anyone at Novo Nordisk. The Panel also noted that the distributor had sold Saxenda to health professionals and clinics in the same region in which the representative promoted the product. The Panel was very concerned that despite there being a potential conflict of interest, the representative had not disclosed his/her interest and neither representative had disclosed their interests in the other company as required by Novo Nordisk’s Business Ethics Code of Conduct and, according to Novo Nordisk, in breach of their employment contracts. The Panel considered that the Novo Nordisk employees had failed to maintain a high standard of ethical conduct in this regard and a breach was ruled.

The Panel did not consider that it had evidence before it that Novo Nordisk had failed to maintain high standards in relation to the disclosure of conflicts of interest or that it had otherwise brought the industry into disrepute; it had a Business Ethics Code of Conduct which required employees to disclose conflicts of interest and the matter was also covered by Novo Nordisk’s standard employment contract. Employees, including the employees in question, were trained annually on the Business Ethics Code of Conduct. The Panel therefore ruled no breach of the Code.