Drugmaker Genentech will pay the government $67 million to settle allegations that it oversold the effectiveness of one of its cancer drugs.
A former Genentech employee alleged that the drugmaker misrepresented the effectiveness of Tarceva, a drug used to treat non-small cell lung cancer. Genentech touted the drug's efficiency broadly when it actually only worked in a small subset of patients, the whistle-blower alleged. That led providers to submit false claims to the government for the drug, according to the whistle-blower.
Genentech did not admit to any wrongdoing as part of the settlement.
“We believe our Tarceva promotional communications and practices were and are entirely proper and in compliance with the law,” Holli Kolkey, a Genentech spokeswoman, said in a statement Tuesday. “This settlement, however, allows the company to avoid the burden, disruption, cost and distraction of protracted civil litigation and to focus instead on our business of developing medicines that extend and improve human lives.”
Jeb White, a partner at Nolan Auerbach & White who represented the whistle-blower, said the settlement is the first time the government has recovered money in a False Claims Act case involving allegations of a drug company making misleading representations about a drug's survival data. He believes the settlement could lead to more, similar cases.
“The Justice Department has now signaled to the whistle-blowers and should-be whistle-blowers they're interested in cases involving incorrect survival data,” White said. “I think the flood gates will now be open on those kinds of cases.”
Patrick Burns, co-executive director of the Taxpayers Against Fraud Education Fund, a not-for-profit that supports whistle-blower incentive programs, called the settlement a win for the American people.
“If you're giving a patient medicine that doesn't work, you're preventing the patient from getting medicine that does work,” Burns said. “This is not about billing. This is about life lost because time is lost.”
He said, however, that there's almost never a rush on whistle-blowers filing any type of False Claims Act cases because of a settlement. He noted that about 600 False Claims Act cases are filed each year, which he believes is a relatively low number.
Areta Kupchyk, a partner at Foley Hoag who advises pharmaceutical companies, said she doesn't believe this latest case is unique. She said whistle-blowers have long brought lawsuits alleging misleading statements about products.
In successful False Claims Act cases, whistle-blowers are entitled to a share of whatever the government is able to recover. The whistle-blower in this case, former Genentech product manager Brian Shields, will get more than $11 million.
