Consumer Fraud

FCA Suit Alleging Cancer Drug Fraud Ends in $67-Million Settlement

whistleblower 5 370x210 FCA Suit Alleging Cancer Drug Fraud Ends in $67 Million SettlementGenentech and OSI Pharmaceuticals will pay the U.S. government $67 million to settle a False Claims Act lawsuit brought by a whistleblower who accused the drug makers of misleading doctors about the effectiveness of the cancer drug Tarceva.

San Francisco-based Genentech and OSI Pharmaceuticals of Farmingdale, N.Y., jointly promoted Tarceva, which is approved to treat certain patients with non-small cell lung cancer and pancreatic cancer.

According to the federal lawsuit, between January 2006 and December 2011, Genentech and OSI overstated Tarceva’s effectiveness  to physicians when there was little evidence to show the drug effectively treated lung cancer in patients unless they had never smoked or had a mutation in the epidermal growth factor receptor, a protein involved in the growth and spread of cancer cells.

“Drug manufacturers that make misleading claims about their product’s effectiveness can jeopardize the health of patients – in this case, cancer patients,” said Health and Human Services Department Special Agent Steven J. Ryan, who helped investigate the claims. “Our agency will continue to protect both patients and taxpayers by holding those who engage in such practices accountable for their actions.”

According to the U.S. Justice Department, $62.6 million of the settlement will go to the federal government and $4.4 million will be dispersed among state Medicaid programs that paid for Tarceva treatments.

Former Genentech employee Brian Shields filed the lawsuit in federal court in San Francisco under the whistleblower provisions of the False Claims Act, which allows private parties to sue on behalf of the federal government in cases of suspected fraud targeting taxpayer-funded agencies and programs.

Whistleblowers whose FCA cases result in a financial recovery for the U.S. government are awarded 15 to 30 percent of the total settlement or judgement. In this case, Mr. Shields will receive approximately $10 million as his reward.

Source: U.S. Department of Justice