Genentech, OSI Pharma to Fork Over $67 Million for Misleading Info About Cancer Drug Efficacy

June 7, 2016
By Alex Keown, BioSpace.com Breaking News Staff

WASHINGTON – Genentech and OSI Pharmaceuticals, LLC have been ordered to pay $67 million to resolve allegations they made misleading statements about the effectiveness of the oral cancer drug Tarceva to treat non-small cell lung cancer, the U.S. Department of Justice announced Monday.

According to the Justice Department, between January 2006 and December 2011, South San Francisco-based Genentech and New York-based OSI , made misleading representations to physicians and other health care providers about the efficacy of Tarceva for the treatment of lung cancer. Federal officials said “there was little evidence to show that Tarceva was effective to treat those patients unless they also had never smoked or had a mutation in their epidermal growth factor receptor, which is a protein involved in the growth and spread of cancer cells.” Because of that lack of evidence, the federal government contended its healthcare programs overpaid for the medication.

Benjamin Mizer, head of the Justice Department’s Civil Division, said in a statement that the government will hold pharmaceutical companies accountable for misleading statements regarding efficacy of the products.

“Pharmaceutical companies have a responsibility to provide accurate information to patients and health care providers about their prescription drugs,” Mizer said in a statement.

Holli Kolkey, a spokeswoman for Genentech, a division of Roche , told Reuters the company maintains its promotional communications and practices around Tarceva “were and are entirely proper and in compliance with the law.” By making the settlement, Kolkey said that allows Genentech and OSI, which was acquired by Astellas Pharma Inc. in 2010, to avoid any litigation.

Of the $67 million, the federal government will receive $62.6 million and state Medicaid programs will receive $4.4 million. Medicaid is funded jointly by state and federal governments.

The lawsuit against the two companies that jointly develop Tarceva was filed by former Genentech employee, Brian Shields, under the whistleblower provisions of the False Claims Act. That provision permits private individuals to sue on behalf of the government for false claims and to share in any recovery, the Department of Justice said in its statement. Shields will receive approximately $10 million.

Since January 2009, the Justice Department has recovered more than $29.8 billion through False Claims Act cases. Tarceva was initially approved by the U.S. Food and Drug Administration (FDA) for the treatment of advanced-stage non-small cell lung cancer whose cancer has not spread or grown after initial treatment with certain types of chemotherapy. In 2013, the FDA granted Tarceva additional approval for first-line treatment of metastatic non-small cell lung cancer in patients whose tumors have certain epidermal growth factor receptor (EGFR) activating mutations.

The case is captioned United States ex rel. Shields v. Genentech, Inc., et al., Case No. CV 11 0822 MEJ (N.D. Ca.).