Feds squeeze $67M from two pharmaceutical companies for cancer-drug claims
By Cheryl Miller, From The Recorder
SACRAMENTO—Genentech Inc. and OSI Pharmaceuticals LLC will pay a combined $67 million to resolve allegations that they overstated the ability of the drug Tarceva to treat certain non-small cell lung cancer patients, the U.S. Attorney’s Office for the Northern District of California said Monday.
Genentech, based in South San Francisco, and OSI Pharmaceuticals of Farmingdale, New York, co-promoted Tarceva to doctors and health care providers between 2006 and 2011 as an effective treatment for the most common form of lung cancer. Federal prosecutors say that there is little evidence that Tarceva is effective unless recipients have never smoked or unless they have a mutation in a protein involved in the growth of cancer cells.
The settlement stems from a qui tam lawsuit brought in San Francisco federal district court under provisions of the False Claims Act by former Genentech employee Brian Shields. He will receive approximately $10 million. The case was still under seal Monday evening.
“We believe our Tarceva promotional communications and practices were and are entirely proper and in compliance with the law,” Genentech spokeswoman Holli Kolkey said in an email. Kolkey said the settlement “allows the company to avoid the burden, disruption, cost and distraction of protracted civil litigation.”
Astellas Pharma Inc. acquired OSI Pharmaceuticals in 2010. An Astellas spokesman said that the alleged misconduct occurred before the Japanese company purchased OSI.
“We continue to conduct our business with a strong sense of ethics and maintain a culture of compliance throughout the organization,” Astellas said a statement after the settlement was announced.
Neither Genentech nor OSI Pharmaceuticals admitted any wrongdoing in the settlement.
Of the $67 million, the federal government will receive $62.6 million, and state Medicaid programs will receive $4.4 million.
“This settlement demonstrates the government’s unwavering commitment to pursue violations of the False Claims Act and recover taxpayer dollars spent as a result of a misleading marketing campaigns,” U.S. Attorney Brian Stretch for the Northern District of California said in a statement.
IMAGE: U.S. Department of Justice building in Washington, D.C. January 10, 2012. Photo by Diego M. Radzinschi/THE NATIONAL LAW JOURNAL. Diego M. Radzinschi / The National Law Journal
