The US Department of Justice (DOJ) recently announced that it had reached a $67 million settlement with two pharmaceutical companies over alleged false claims made about cancer drug Tarceva.
Pharma Companies Misled Doctors for Six Years
The lawsuit was brought about thanks to a whistleblower, Genetech employee Brian Shields. Shields alleged that drug makers Genetech and OSI Pharmaceuticals deliberately made misleading claims about Tarceva. He testified that the drug’s makers essentially lied about certain aspects of the drug between January 2006 and December 2011.
Tarceva (erlotinib) is used to treat lung and pancreatic cancer and was approved by the US Food & Drug Administration (FDA) in 2004. Genetech, located in South San Francisco, California, and OSI, located in Farmingdale, New York, co-promote the drug in the US.
Big Pharma’s Profit-Making Schemes
Shields said that Genetech and OSI led doctors to believe that the drug could be used on a wide swath of patients diagnosed with non-small-cell lung cancer. However, both companies knew that Tarceva was only effective for patients who met certain narrow criteria. As a result, the two pharma companies committed multiple types of fraud for a span of at least six years.
- Genetech and OSI’s deceit led doctors to order much more of Tarceva than they needed, thereby boosting the pharma companies’ profits. And since there is no generic equivalent of Tarceva sold in the US, patients are forced to pay whatever price the pharma companies choose to charge for Tarceva.
- Doctors may have chosen Tarceva over other drugs that would have resulted in better clinical outcomes for their patients.
- The two pharma companies did not report all the side effects and negative events that might happen with Tarceva, possibly putting patients’ lives at stake.
Lawsuit Brought Against Genetech and OSI via False Claims Act
The lawsuit was filed against Genetech and OSI Pharmaceuticals under the False Claims Act. The False Claims Act, also called the Lincoln Law, rewards those who blow the whistle on fraud affecting the US government. A whistleblower whose claims result in a successful suit are entitled to a percentage of the case’s settlement award.
In the case of Tarceva, the government sued due to Medicare fraud. Whistleblower Brian Shields will see about $10 million of the settlement and state Medicare programs will receive about $4.4 million.
It remains to be seen whether Genentech and OSI will be significantly affected by the outcome of the lawsuit.
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