Prosecutors win $67 million settlement with pharma firms accused of deceit

tarcevaFederal prosecutors have wrung $67 million in a settlement with two pharmaceutical companies accused of deceiving doctors to prescribe a drug that the firms knew would be ineffective in treating lung cancer patients. Genentech and OSI Pharmaceuticals pushed the drug Tarceva for non-small-cell lung cancer, “even though studies had shown that it worked for just those who had never smoked or had a certain gene mutation,” the Los Angeles Times says.

The paper and prosecutors described the sleazy promotion of Tarceva, which was disclosed in a lawsuit filed against Genentech by a former employee. He will receive a $10 million payment under federal whistleblower laws. His lawsuit asserted that the companies wrongly hawked Tarceva by:

Giving doctors illegal kickbacks disguised as fees for making speeches or serving on Genentech’s advisory boards. Sales representatives across the country were ‘instructed to spend lavishly’ on physicians, the case said, and given ‘an unlimited budget to wine and dine.’ Genentech also organized lunches or dinners for lung cancer patients where ‘patient ambassadors’ were paid fees to speak about how Tarceva could be used in ways never approved by regulators.

The Times, somberly quotes the lawsuit and notes that, due to the Tarceva deceptions, “some patients may have died earlier than they would have if they had taken more effective drugs. … ‘Cancer patients only get one shot at first-line treatments and defendants took that opportunity away.’ “

Under the settlement, prosecutors said, “the federal government will receive $62.6 million and state Medicaid programs will receive $4.4 million.  The Medicaid program is funded jointly by the state and federal governments.”

Genentech officials denied wrongdoing in the case and said they settled to avoid costly litigation; OSI has been acquired by a Japanese company.

Prosecutors, in announcing this settlement, crowed about the increasing role and success of an anti-fraud task force with staff from the U.S. Justice Department and the federal Health and Human Services agency. Their joint efforts, officials said, have tapped “one of the most powerful tools” for prosecutors, the federal False Claims Act. “Since January 2009, the Justice Department has recovered a total of more than $29.8 billion through False Claims Act cases, with more than $18.2 billion of that amount recovered in cases involving fraud against federal health care programs,” officials said.

Still, as a new report in the AARP magazine finds, Medicare loses $60 billion to fraud and con artists annually, and prosecutors’ crackdowns have a long way to go to eliminate this waste and abuse.

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