Sanofi SA (NYSE:SNY) Files Suit Against Novo Nordisk A/S (ADR) (NYSE:NVO) Over False Insulin Claims

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Sanofi SA (NYSE:SNY) Files Suit Against Novo Nordisk A/S (ADR) (NYSE:NVO) Over False Insulin Claims

Novo Nordisk A/S (NYSE:NVO) has been sued by Sanofi SA (NYSE:SNY) for making false claims. In the lawsuit filed in the United States, the French company has accused Novo Nordisk of claiming that the insulin drugs manufactured and distributed by Sanofi would cease being available to many patients in the US.

According to Sanofi, this was in an underhanded tactic by Novo Nordisk to market its own insulin drug. The claims were contained in Novo Nordisk’s marketing materials for its insulin branded Tresiba. Sanofi is seeking to compel Novo Nordisk to offer monetary compensation as well as withdraw the marketing materials making the false claims.

Marketing materials

According to Sanofi, Novo Nordisk urges both patients and doctors in the marketing materials to change from using or prescribing Sanofi’s drugs, namely Toujeo and Lantus, in the treatment of diabetes and instead turn to Tresiba. The argument that Novo Nordisk makes to encourage the switch, according to Sanofi, is that beginning January, United States pharmacy benefit manager, CVS Caremark, will block drugs from Sanofi.

“(W)e believe Novo’s statements concerning CVS Caremark’s formulary decision on Lantus and Toujeo coverage contain false and misleading claims about the continued availability of Lantus and Toujeo,” a Sanofi spokesperson told Reuters in an emailed statement.

Ailing sector

In the world’s biggest health market, the US, Toujeo and Lantus are two of the drugs that Sanofi sells for the treatment of diabetes. Pressure has, however, been mounting in this segment of the market as UnitedHealth Group, a major insurer, and CVS revealed that they wanted to replace Toujeo and Lantus with Basaglar, a cheaper drug manufactured by Eli Lilly and Co (NYSE:LLY). This will mean that the health plans that will continue to cover the drugs from Sanofi will charge policyholders more for these drugs.

In the most recent quarterly earnings report, Sanofi continued to project that its diabetes business would decline by an average of between 4% to 8% per year until 2018.

In Tuesday’s trading, shares of Sanofi SA rose by 0.56% to close the day at $39.69. In the same trading session, Novo Nordisk A/S fell by 0.43% to close the day at $35.57 a share.