Genentec, OSI Pharma to pay $67M to resolve Tarceva false claims

By Allen Cone
Genentec, OSI Pharma to pay $67M to resolve Tarceva false claims
Federal prosecutors in San Francisco say Genentech and OSI Pharmaceuticals have agreed to pay $67 million to settle allegations they misled doctors about the effectiveness of cancer drug Tarceva. Photo by sebra/Shutterstock

SAN FRANCISCO, D.C., June 7 (UPI) -- Pharmaceutical companies Genentech Inc. and OSI Pharmaceuticals LLC will pay $67 million to settle False Claims Act allegations for misleading statements about the effectiveness of the drug Tarceva to treat non-small cell lung cancer, the U.S. Department of Justice announced.

Genentech, based in San Francisco, and OSI, located in Farmingdale, N.Y., co-market the drug.


In 2009, OSI was acquired by Astellas Pharma, a Japanese company, and in 2011 was converted to a limited liability corporation. Genentech was acquired in 2009 by Hoffmann-La Roche AG of Basel, Switzerland.

The claims resolved are allegations only and liability hasn't been determined, the Justice Department said in a release.

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The drug is used to treat "advanced-stage non-small cell lung cancer (NSCLC) or advanced-stage pancreatic cancer," according to the Tarceva website. It was approved by Food and Drug Administration in 2004.

Between January 2006 and December 2011, the Justice Department said Genentech and OSI Pharmaceuticals misled physicians and other health care providers about the effectiveness of Tarceva in treating lung cancer. Little evidence support those claims unless users also had never smoked or had a mutation in their epidermal growth factor receptor.


"Pharmaceutical companies have a responsibility to provide accurate information to patients and health care providers about their prescription drugs," Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department's Civil Division, said Monday. "The Department of Justice will hold those companies accountable that mislead the public about the efficacy of their products."

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The federal government will receive $62.6 million and state Medicaid programs will get $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 misleading marketing campaigns," said U.S. Attorney Brian Stretch for the Northern District of California.

Former Genentech employee Brian Shields filed suit in federal court in San Francisco under the qui tam, or whistleblower, provisions of the False Claims Act. Shields will receive approximately $10 million.

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Since January 2009, the Justice Department said in a release it has recovered more than $29.8 billion through False Claims Act cases. This includes more than $18.2 billion involving the defrauding of federal health care programs.

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