Genentech, OSI to pay $67 mn to settle false claims on cancer drug Tarceva

Pharmaceutical companies Genentech Inc and OSI Pharmaceuticals have agreed to pay $67 million to settle misleading statements made on the effectiveness of non-small cell lung cancer treatment drug Tarceva.

Genentech was acquired in 2009 by Swiss drug maker Hoffmann-La Roche AG, while OSI was acquired by Japan's Astellas Pharma in 2011.

Genentech, based in California, and OSI based in New York, co-promote Tarceva, which is approved to treat certain patients with non-small cell lung cancer or pancreatic cancer. 

The US Department of Justice (DoJ) alleged that between January 2006 and December 2011, Genentech and OSI made misleading representations to physicians and other health care providers about the effectiveness of Tarceva to treat certain patients with non-small cell lung cancer, when 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.

As a result of the $67 million settlement, the federal government will receive $62.6 million and $4.4 million to Medicaid, a program funded jointly by the state and federal governments.

Former Genentech employee Brian Shields, a whistleblower who filed the suit, will receive approximately $10 million under the provisions of the False Claims Act.

''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 misleading marketing campaigns,'' said US attorney Brian Stretch, of the Northern District of California.

''Pharmaceutical companies that make misleading or unsubstantiated statements about their products can put patients at risk,'' said Howard Sklamberg, deputy commissioner at the US Food and Drug Administration's global regulatory operations and policy.

Since January 2009, the DoJ has recovered more than $29.8 billion through False Claims Act cases, including more than $18.2 billion involving the defrauding of federal health care programs.