Genentech and OSI: The Patients Behind the Tarceva Sales Pitch

Genentech and OSI agreed to pay $67 million in the Tarceva settlement to resolve allegations that misleading effectiveness statements caused false claims for non-small cell lung cancer treatment. The government’s allegation turned on which patients received the drug, when they received it and what supported using it for them. For someone who reviewed the science or delivered the sales message, those details are the heart of the case.

The pharmaceutical fraud case began with a whistleblower’s qui tam action, filed in federal court in San Francisco by a former Genentech employee. The Justice Department announced the resolution on June 6, 2016.

The settling companies were Genentech Inc. and OSI Pharmaceuticals LLC. The agreement describes both companies as manufacturing, distributing, marketing and promoting Tarceva.

What the Tarceva Effectiveness Allegations Covered

The Tarceva effectiveness allegations concerned representations to physicians and other health care providers from 2006 through 2011. The United States alleged that the companies promoted effectiveness for certain non-small cell lung cancer patients despite little evidence of benefit unless the patients had an EGFR mutation or had never smoked.

The settlement’s description of the resulting claims is more specific. It concerns current or former smokers without a known EGFR mutation who received Tarceva as first-line therapy and had an ECOG performance status of zero or one. The agreement describes those as the healthiest categories on that performance scale.

Treatment sequence matters here. The agreement describes an FDA-approved use for locally advanced or metastatic non-small cell lung cancer after at least one earlier chemotherapy regimen had failed. It also records a 2013 approval for first-line treatment in patients with certain EGFR mutations.

An oncology employee can recognize what changed: the patient qualifications in the scientific support have to survive the trip into the sales message.

How the Sales Message Reached Government Claims

The government alleged that the effectiveness representations knowingly caused false claims or purchases by Medicare, Medicaid, TRICARE and the Federal Employees Health Benefits Program. The agreement tied those payments to first-line uses that lacked FDA approval, a medically accepted indication or coverage under the applicable programs.

That is the payment connection in off-label promotion cases. The pharmacy or physician sends the bill, but the manufacturer can set the claim in motion through its sales message. The relevant business decisions can begin well before the prescription reaches the organization asking the government to pay.

The industry separates these decisions. The Food and Drug Administration controls whether a drug may be sold and on what label. Government healthcare programs determine payment under their own rules. The government alleged that the sales message steered patients to a drug with little evidence it would help them, with taxpayers paying for it.

For an insider, that makes the handoff between departments consequential. A clinical team may understand the patient population behind an effectiveness claim. Sales staff may know the population the commercial message actually reached. Reimbursement records show which program was asked to pay. We examine how those accounts fit together.

Why the Indication Matters in Oncology

An oncology drug’s indication can affect both its clinical value and the payer’s treatment of the prescription. The 2018 Managed Care article Indication-Specific Drug Pricing–Simple in Theory, Complex in Reality explains why different uses of the same drug can deliver different clinical benefits.

The article also identifies a practical information gap. The indication may be available in the patient’s electronic medical record while missing from the information captured when the pharmacy dispenses the drug. The transaction can identify the product without carrying the clinical detail needed to understand its use.

That observation matters when examining allegations like Tarceva’s. We connect the dispensing and payment information with the treatment setting and patient characteristics behind it. A product-level sales total cannot answer the patient-population question that the government’s allegation raises.

When Scientific Claims Become Coverage Support

Drug-reference entries can carry scientific claims into reimbursement decisions. Medicaid’s definition of a medically accepted indication includes certain uses supported by drug compendia, the reference works used to assess drug uses. That gives compendia listings a direct financial consequence.

A separate Amgen case shows how that connection can become part of an alleged scheme. In its civil allegations, the Justice Department contended that Amgen used articles insufficient to support the safety and effectiveness of off-label uses and improperly obtained compendia listings to secure eligibility for government coverage. A whistleblower’s complaint described the alleged publication strategy:

The complaint alleged that tainted studies supported compendia listings used for government reimbursement decisions. The scientific publication allegedly had a commercial job beyond persuading a prescriber: helping establish the basis for payment. That is why we follow an effectiveness claim through the places where it acquired authority.

What the Tarceva Settlement Required

The settlement agreement allocated $62,645,000 to the United States and $4,355,000 to participating Medicaid states.

What Evidence Is Needed to Prove Fraud?

Evidence in an effectiveness case connects the scientific support, the promotional representation, what the company knew and the resulting government claim. For claims involving clinical trial data, we examine where a finding changed as it moved into commercial use.

In a case with the Tarceva allegations, that comparison includes the population studied, the treatment sequence and the patients reached by the promotion. The version of the message used at the time matters alongside the approval and coverage support for that use. Internal review comments can help explain what the people approving the message understood.

A clinical reviewer may know why a patient qualification mattered. A medical-information employee may recognize what a response to a physician left out. A sales employee may know how sales materials became a field instruction. We bring that knowledge together with the prescribing and payment records to assess the case. Your view of one decision can explain a connection that the other records leave obscure.

How Much Money Do Pharmaceutical Whistleblowers Get for Exposing Fraud?

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. The Tarceva agreement provided for a whistleblower reward of about $10.6 million from the federal settlement proceeds.

You Know How the Effectiveness Claim Was Sold

If you saw a patient qualification disappear between the clinical review and the sales pitch, speak to one of our whistleblower experts about what changed. We work with you to build your strongest pharmaceutical whistleblower case around that knowledge, bring in pharmaceutical whistleblower lawyers who understand oncology promotion and government reimbursement, and stand beside you through the case.