Plaintiff State of Washington alleged that Novo Nordisk Inc. (“NNI”) caused physicians to prescribe its drug, NovoSeven®, to Washington hemophilia patients by: (1) promoting it “off-label” for prophylaxis and “high dose” use; (2) paying kickbacks to physicians; and (3) paying bribes to patients, all of which rendered claims to Medicare and Washington Medicaid false.
The State of Washington has been investigating this case for almost fifteen years, hoping to find evidence of unlawful conduct that allowed its Medicaid program to recoup money it paid for a medically necessary, life-saving drug.
The State of Washington filed a Daubert motion to exclude the testimony of Defendant NNI’s expert witness, Nicholas J. Janiga. Janiga’s report concluded that the compensation NNI paid to 12 healthcare providers between 2005 and 2016 was consistent with fair market value.
Washington challenged Janiga’s testimony because “his opinions are not premised on sufficient facts or data, nor are they the product of reliable principles and methods.”
For instance, Washington objected that Janiga analyzed only 12 physicians, and argued that he should have considered how many other consultants “in a position to prescribe NovoSeven” were paid by NNI. The Court, however, regarded this disagreement over the scope of discovery as merely a matter for cross-examination.
Business Valuation Expert Witness
Nicholas J. Janiga is an Accredited Senior Appraiser in Business Valuation by the American Society of Appraisers. He is currently the Managing Director of HealthCare Appraisers, Inc.
Janiga has extensive knowledge and experience in appraising healthcare business enterprises and medical professionals’ compensation. Moreover, he has extensive experience in analyzing the fair market value of healthcare transactions and arrangements involving the Anti-Kickback Statute (AKS).
Discussion by the Court
First, Washington argued that Janiga incorrectly assumed that the physicians provided necessary bona fide services. It also claimed Janiga’s opinion omitted other benefits physicians received from NNI, such as expenses for meals, lodging, and travel, and assistance with writing and publishing medical scholarship.
NNI asked Janiga only to opine about whether the physicians’ compensation was fair market value. He was not asked to, and did not, opine on any other elements of the AKS’ “Safe Harbor.” Although the Court acknowledged that these were valid subjects for cross-examination, it held that they did not warrant disqualifying Janiga merely because of the limited scope of his study.
Washington also asserted that Janiga’s report did not account for the fact that NNI’s compensation structure is based on a physician’s “geographical sphere of influence.”
It argued that this compensation structure is improper because physicians may end up receiving work and compensation for the purpose of influencing other physicians. The Court viewed a physician’s influence in the medical community akin to stature and reputation. This is a valid factor in determining a physician’s compensation and affects the weight, not the admissibility, of Janiga’s testimony.
Finally, Washington argued that Janiga’s report did not mention that Craig Kessler, the Editor-in-Chief of the publication Haemophilia, received “revenue based compensation from that publication whose revenue was enhanced by [NNI’s] purchase of reprints.” Washington additionally contended that NNI directly paid Kessler for his advice on this case.
Since Kessler’s advice to NNI on this case pre-dates Washington’s allegations that NNI inappropriately paid Kessler, any compensation he received for his advice is not relevant to Janiga’s opinion that Kessler was compensated at fair market value.
Held
The Court denied Washington’s motion to exclude the testimony of Nicholas J. Janiga.
Key Takeaway:
Janiga has sufficient expertise and experience appraising healthcare enterprises and compensation arrangements. Basically, his knowledge, background, and opinions about whether NNI compensated the 12 physicians at fair market value satisfy Rule 702‘s requirement in that his testimony will assist the jury in understanding the evidence and determining facts in issue.
His testimony will be permitted because he is a qualified expert in the healthcare compensation appraisal through education, training, experience, knowledge, and skill, his report is based on sufficient facts or data, and his opinions are the product of the reliable application of principles and methods.
Please refer to the blogs previously published about this case:
Law & Legal Expert Helps Jury Understand Medicaid’s Complex Regulatory Framework
Hematology Expert’s Opinion on NovoSeven’s Medical Appropriateness Admitted
Pharmacology Expert’s Testimony About the Purpose and Effect of Illegal Marketing Tactics Excluded
Internal Medicine Expert’s Testimony Limited Despite His Physician Behavior Experience
Case Details:
| Case Caption: | United States ex rel. Siegel v. Novo Nordisk, Inc. |
| Docket Number: | 3:23cv5459 |
| Court Name: | United States District Court, Washington Western |
| Order Date: | July 15, 2025 |
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