Pharma Firms Reach $67M Deal With Feds

     SAN FRANCISCO (CN) — Drugmaker Genentech and another pharmaceutical company will pay $67 million to settle a federal lawsuit accusing them of overstating the effectiveness of cancer drug Tarceva, the Justice Department said.
     Federal prosecutors claim that from 2006 through 2011, Genentech and co-defendant OSI Pharmaceuticals made misleading statements to doctors about how well the drug worked for patients with non-small cell lung cancer.
     In fact, the government claims, there was “little evidence” that Tarceva worked effectively for lung cancer patients — except for those who had never smoked or who had a mutation in a certain cell protein.
     As a result of the exaggerated marketing to doctors, Genentech and OSI “knowingly caused false or fraudulent claims” to be submitted to Medicare and other federal and state health care programs for purchases of Tarceva for cancer patients who were smokers or lacked the mutation, according to the settlement agreement released late Monday.
     The case appears to be the first settlement under the federal False Claims Act alleging a drug company exaggerated the survival data for a cancer drug, according to the law firm for the Genentech whistleblower who launched the lawsuit.
     Earlier cases dealt with marketing drugs for unapproved uses.
     “However, in this case, the manufacturers allegedly marketed their lung cancer drug with knowingly inflated survival data,” Nolan Auerbach & White partner Marcella Auerbach said in her firm’s release. “As alleged in the … complaint, the end result was a substantial boost in sales.”
     The firm’s 2011 lawsuit on behalf of former Genentech employee Brian Shields claimed that the companies’ misleading marketing caused some lung-cancer patients “to die earlier and faster, with more pain.”
     Federal prosecutors agreed to take over the case early on and reached Monday’s settlement with the drug companies.
     “Drug manufacturers that make misleading claims about their product’s effectiveness can jeopardize the health of patients — in this case, cancer patients,” Health and Human Services official Steven J. Ryan said in a statement announcing the settlement. “Our agency will continue to protect both patients and taxpayers by holding those who engage in such practices accountable for their actions.”
     “Pharmaceutical companies have a responsibility to provide accurate information to patients and health care providers about their prescription drugs,” Benjamin C. Mizer, chief of the Justice Department’s Civil Division, said in the statement. “The Department of Justice will hold those companies accountable that mislead the public about the efficacy of their products.”
     The companies said the settlement allows them to put the five-year-old litigation behind them.
     “We believe our Tarceva promotional communications and practices were and are entirely proper and in compliance with the law,” Genentech spokesman Andrew Villani said in an emailed statement. “This settlement, however, allows the company to avoid the burden, disruption, cost and distraction of protracted civil litigation and to focus instead on our business of developing medicines that extend and improve human lives.”
     Villani also noted the settlement does not require the companies to submit to a detailed “corporate integrity agreement” with the Health and Human Services Department.
     Under the settlement agreement, Genentech and OSI will pay $62.6 million to the federal government and $4.4 million to Medicaid programs in several states. South San Francisco-based Genentech is owned by Swiss drug company Roche, while OSI is owned by Astellas Pharma of Japan.
     Shields will receive about $10 million of the total settlement out of the federal government’s share, according to the agreement.
     Brian Stretch, the U.S. attorney in San Francisco who announced the deal Monday, said it “demonstrates the government’s unwavering commitment to pursue violations of the False Claims Act and recover taxpayer dollars spent as a result of misleading marketing campaigns.”

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