$67 Million to Resolve False Claims Act Allegations Relating to Tarceva
The governmental crackdown on fraud committed against its agencies by private companies sometimes has the effect of also ensuring that some of the most vulnerable people in our society – those with severe illnesses – are protected. This was demonstrated earlier this month when the Department of Justice announced that pharmaceutical companies Genentech Inc. and OSI Pharmaceuticals LLC had agreed to pay $67 million to settle False Claims Act allegations that they made misleading statements about the effectiveness of Tarceva a drug used to treat non-small cell lung and pancreatic cancer. Genentech and OSI Pharmaceuticals are located respectively in California and New York. “Pharmaceutical companies have a responsibility to provide accurate information to patients and health care providers about their prescription drugs,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “The Department of Justice will hold those companies accountable that mislead the public about the efficacy of their products.”
The settlement resolved allegations that between January 2006 and December 2011, Genentech and OSI Pharmaceuticals made false statements to physicians and other health care providers boasting of the effectiveness of Tarceva to treat certain non-small cell lung cancer when there was little evidence to support such statements. The evidence indicated that Tarceva was effective mainly in cases where patients had never smoked or had not had mutations in their epidermal growth factor receptor. (These are proteins involved in the growth and spread of cancer cells). As a result of the $67 million settlement, the government will receive $62.6 million and the state Medicaid programs will receive $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. “The FDA will continue to work to protect the public’s health by ensuring that companies do not mislead healthcare providers about their products,” said Deputy Commissioner Howard R. Sklamberg for FDA’s global regulatory operations and policy. The settlement also resolves allegations filed by a former Genentech employee Brian Shields. His lawsuit was filed under the qui tam, or whistleblower, provisions of the False Claims Act. This act permits individuals to sue on behalf of the federal government and entitles them to receive a portion of any settlement reached in cases of fraud committed against the government and its agencies. Shields portion of the settlement comes to approximately $10 million.
The settlement is another example of the government’s efforts to combat health care fraud and is an achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT). This initiative was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services. The partnership between the two departments has resulted in the recovery of more than $29.8 billion through False Claims Act cases. If you know of fraud that has been committed against a government program or agency you are encouraged to report it and to consult with a whistleblower law firm.
