Drug companies pay $67M for Tarceva® misrepresentation, false claims allegations

Genentech, Inc. and OSI Pharmaceuticals, LLC, resolved False Claims Act (FCA) (31 U.S.C. §3729) related to the drug Tarceva® to the tune of $67 million. The Department of Justice (DOJ) alleged that between January 2006 and December 2011, the companies misled physicians regarding the effectiveness of the drug’s treatment of non-small cell lung cancer.

Approved use

Tarceva is approved to treat non-small cell lung cancer and pancreatic cancer. However, studies revealed that Tarceva was not generally effective for the treatment of non-small cell lung cancer for certain patients. Only those patients who had either never smoked or whose cancer contained a certain protein mutation were likely to respond. Despite these findings, the companies promoted Tarceva for use in patients in which the drug was not likely to be effective.

This promotion allegedly caused a loss to state and federal governments through the submission of false claims in violation of the FCA. State Medicaid programs will receive $4.4 million from the settlement, while a qui tam relator will be granted about $10 million.