DES MOINES – The State of Iowa will receive $21,449.57 as part of a national settlement to resolve allegations that Genentech, Inc. and OSI Pharmaceuticals, LLC made misleading representations to physicians and other health care providers about the effectiveness of the drug, Tarceva. “These misleading representations caused false or fraudulent claims for Tarceva to be submitted to the State’s Medical Assistance Program (Medicaid) for use that was not approved by the Food & Drug Administration (FDA),” Iowa Department of Inspections and Appeals (DIA) Director Rod Roberts said.
Specifically, this settlement resolves allegations that OSI and Genentech promoted Tarceva off-label by making false and misleading representations that the medication was effective to treat first-line non-small cell lung cancer in certain patients who were current or former smokers. “There is little evidence to support Tarceva’s effectiveness in this patient population, unless the patient also presents with a certain gene mutation,” Roberts said, adding: “The agreement also resolves allegations that the companies paid kickbacks to health care professionals as inducement to prescribe Tarceva.”
The investigation resulted from a qui tam action originally filed in the United States District Court for the Northern District of California under the federal False Claim Act and various state false claims statutes.
A National Association of Medicaid Fraud Control Units team participated in the investigation and conducted the settlement negotiations with Genentech and OSI on behalf of the states and the District of Columbia. The negotiations team included representatives from the Offices of the Attorneys General for the states of Texas, California, Massachusetts, and New York.
In Iowa, allegations of fraud committed by Medicaid providers are investigated by the DIA’s Medicaid Fraud Control Unit (MFCU), which participated in the Iowa portion of the investigation. In addition to provider fraud cases, MFCU investigates alleged abuse and neglect of residents in long-term care facilities that receive Medicaid reimbursements. MFCU also looks into allegations that residents have been defrauded of personal funds or possessions. Iowa’s False Claims Act is overseen by the Iowa Attorney General’s Office, which approved the settlement agreement on the part of the State of Iowa.