The Bitter Pill

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Genentech and Biogen Legal Troubles – When It Rains It Pours

Evelyn Pringle March 7, 2006

Rituxan gained FDA approval in 1997, as a treatment for a certain type of non-Hodgkin’s lymphoma. Roughly 12,760 patients in the US have the form of cancer Rituxan was approved to treat. Yet by 2005, sales of the drug grew to $1.8 billion in the US. A lawsuit filed by a former Rituxan salesman explains how this happened.

On January 11, 2006, Dow Jones reported that Paul McDermott, who worked for Genentech Inc, from March 2004 until April 2005, had filed a whistleblower lawsuit in July 2005, in the US District Court in Maine against Genentech, and its marketing partner, Biogen Idec, alleging the companies illegally promoted Rituxan as a treatment for rheumatoid arthritis (RA).

The allegations in the lawsuit’s complaint describe a blatant kickback scheme aimed at defrauding government health care programs like Medicare, and represent a powerful indictment of the pharmaceutical industry’s all too common systematic recruitment of doctors to promote the off-label use of drugs.

The lawsuit alleges Genentech and Biogen defrauded programs that spent money on Rituxan prescriptions for arthritis. Since most RA patients are senior citizens, Medicare was most often billed for payment.

For cancer, Rituxan costs about $20,000 for a six-treatment course. For rheumatoid arthritis, it costs about $9,088 for a six to nine month treatment, according to the March 3, 2006 Union-Tribune.

So legal problems aren’t the only concerns surrounding off-label drug promotion. “When an expensive drug is used for off-label treatments – particularly when clinical data hasn’t established that it works for that purpose,” the Union reports, “it adds to the burden of a financially strapped health care system, some experts say.”

By law, doctors can prescribe drugs for an unapproved use, but drug makers are not allowed to promote their products for those uses.

As a Genentech sales representative, Mr McDermott alleges he worked as a “professional educational liaison,” a job that involved recruiting doctors to promote Rituxan as a treatment for rheumatoid arthritis.

He alleges sales representatives were sent to the offices of rheumatologists, even though Genentech had no products approved for such treatments.

The complaint alleges Genentech and Biogen used “sham” consulting agreements to pay rheumatologists identified as “key opinion leaders,” who were expected to influence other doctors to prescribe Rituxan for arthritis.

According to the complaint, Genentech and Biogen would identify key opinion leaders among rheumatologists and signed them on as consultants.

Then drug company representatives would set up “rheumatoid arthritis roundtable dinners” at fancy steak houses in major cities and the key opinion leaders were flown in and paid between $2,000 to $2,500 to give a presentation on the off-label use of Rituxan.

The complaint says rheumatologists are used because, “materials promoting Rituxan for off-label treatment of rheumatoid arthritis are more fully accepted and integrated into physicians’ personal belief systems when they are presented as educational in nature in contrast to material that is clearly identified as promotional.”

The suit points out that some physicians refused to participate after learning they could not change the slides or materials prepared by company representatives.

As another promotional technique, the complaint alleges that Genentech identified key journals where articles should appear promoting the off-label use of Rituxan, and encouraged the consultants to write articles that would appear in those journals, and in some cases, wrote the articles for the consultants.

For obvious reasons, off-label drug use is potentially dangerous. According to George Zelcs, Paul McDermott’s attorney, prescribing drugs for unapproved uses undermines the scientific process in place to determine whether drugs are safe and beneficial.

“The new drug industry model is peer-to-peer marketing, using medical professionals – the prescribing doctors – themselves,” Attorney Zelcs said in the March 3, 2006 Union-Tribune. “But once you start to influence that process with financial considerations, it starts to compromise what ought to be independent judgment.”

Mr McDermott is not the first person to call foul when it comes to Genentech’s off-label promotion activities. The company has been called on the carpet several times under similar allegations. In 1999, Genentech settled with the FDA for $50 million over charges that it paid doctors to prescribe its human growth hormone, as well as other, “more aggressive activities,” according to Red Herring on October 5, 2004.

In October 2004, Genentech received a subpoena from the office of the US Attorney in Philadelphia requesting documents related to the off-label promotion of Rituxan in an investigation said to be both civil and criminal in nature.

As sales of the drug soared, simple arithmetic demonstrated that Rituxan was being prescribed for nonapproved uses, says journalist Penny Crabtree, in the March 3, 2006 Union-Tribune.

Rituxan was approved to treat non-Hodgkin’s lymphoma only when chemotherapy failed or the disease had returned after at least one chemotherapy treatment.

“About 58,000 people are diagnosed with non-Hodgkin’s lymphoma each year,” Ms Crabtree notes. “Of those, roughly 12,760 have the slow-growing form that Rituxan was intended to treat,” she said.

“One study of Rituxan use at a single academic hospital, between 1998 and 2001,” Ms Crabtree said, “found that 75 percent of all administrations of the drug were for off-label purposes.”

More than $1.1 million was spent on Rituxan for off-label use at that hospital, she says, compared with $355,000 for FDA-approved uses, according to the 2003 study in the American Journal of Managed Care.

Last month, the drug makers under fire, got a bit of good news. On February 10, 2006 CNN Money Line reported that regulators had approved Rituxan for patients with diffuse large B-cell lymphoma, a fast-growing form of the disease.

But CNN says approval is unlikely to have a dramatic effect on Rituxan sales as most cancer doctors have already been using it for large B-cell lymphoma on an “off-label” basis even though it had not officially been approved for the indication.

On February 28, 2006, more good news was announced when the FDA granted Rituxan approval for the treatment of RA.

Geoff Porges, an analyst for Sanford Bernstein, said he expected the RA indication to add about $400 million to annual US sales of Rituxan, according to the February 28, 2006 Washington Post.

As an RA drug, Rituxan is expected to compete with Orencia, a recently approved medicine from Bristol-Myers Squibb.

However, Biogen executive Burt Adelman told the Post that he expected Rituxan to do well against Orencia as physicians may prefer to go with the better-known drug.

According to the Post, George Porges is not so sure that Rituxan will outsell other drugs. “Porges predicted that while oncologists are comfortable with the drug, rheumatologists may be somewhat reluctant to give patients a medicine that suppresses the immune system over a long period of time.”

In any event, Genentech did not have much time to celebrate its good fortune before receiving another dose of bad news on February 21, 2006, when the US Supreme Court agreed to consider allowing a lawsuit by drug maker MedImmune Inc. to go forward that seeks to end royalties the company pays to Genentech on its drug Synagis, according to a report by the February 22, 2006 Washington Post..

MedImmune’s lawsuit alleges that Genentech illegally obtained a patent on an antibody synthesis technology used in the production of Synagis, a drug that prevents certain respiratory infections in babies.

MedImmune claims Genentech and British biotechnology firm Celltech R&D Ltd. improperly schemed to obtain a patent on antibody technology, in violation of antitrust laws and MedImmune wants the patent invalidated, according to Mercury News on February 21, 2006.

Several companies use manufactured antibodies as the basis of new drugs. In return, the companies pay Genentech licensing fees under patents known as “Cabilly.” That includes MedImmune, Mercury says, which uses antibody technology for Synagis which had sales that topped $1 billion worldwide last year.

Genentech obtained a Cabilly patent in 1989 that was set to expire in 2006. In 2001, it acquired a second patent through negotiations with Celltech, which had a similar patent. The second Cabilly patent is good through 2018.

MedImmune claims Genentech violated antitrust law, the Post says, “by colluding with a British biotechnology company in obtaining an extension on the antibody production patent, and MedImmune is seeking to have Genentech’s patent declared invalid.”

The Supreme Court will not hear the case until the fall term.

On March 2, 2006, yet another problem for Genentech became public knowledge when Reuters reported that Swiss drug maker Roche Holding AG, the majority owner of Genentech, said it would brief health-care regulators on rare cases of a brain condition seen in some patients taking its blockbuster cancer drug Avastin.

According to the New England Journal of Medicine, two women developed reversible posterior leukoencephalopathy syndrome, or RPLS, while on Avastin. Both patients later recovered from the condition, which according to Reuters, can lead to blindness and other complications.

Genentech spokeswoman Colleen Wilson told Reuters the company informed the FDA last year about one case of RPLS and learned of the other case from the journal.

She also said Genentech is investigating a third possible case and that the company would not know how frequently it occurred until it reviewed its safety database for further possible cases.

And last but not least, Biogen Idec has legal problems of its own. In January 2005, its drug Tysabri was the hottest new development for treating MS. The drug gained fast-track approval from the FDA after just one year of clinical trials, when typically two years are required. It seemed so promising that Larry King did a show on the drug.

According to the FDA, at the time of its approval in November 2004, approximately 1,100 MS patients had received Tysabri for one year or more.

Four months later, on February 28, 2005, the joint makers of Tysabri, Biogen and the Elan Corp in Dubland, Ireland, told the FDA they were taking the drug off the market and suspending clinical trials because 3 patients were diagnosed with progressive multifocal leukoencephalopathy, or PML, a disorder that usually only affects people with weakened immune systems, such as AIDS patients, and 2 of the patient had died.

On July 1, 2005, News Inferno.com reported that Tysabri had now been linked to 5 cases of PML.

According to WebMD, “PML is a progressive disease of the brain and spinal cord that primarily affects people with weakened immune systems.”

“The condition is caused by a virus that destroys the sheath that covers the nerves,” WebMed says. “Symptoms include mental deterioration, vision loss, speech disturbances, and movement abnormities or paralysis.”

According to the FDA, in the general population, PML is extremely rare, and virtually never occurs in individuals with normal immune systems. Even in patients with AIDS, only 1 – 5% are diagnosed with the disease during their lifetime.

After Anita Smith died of PML, her husband filed a lawsuit against the drug makers. On February 25, 2006, News Inferno reported a major ruling in the case that ordered Biogen to produce all medical records immediately for Anita Smith.

The lawsuit claims an autopsy determined that she never had MS.

In recent years, drug companies have been trying out MS medications on people with mild symptoms or none at all at the time of treatment, several experts say, including some who, like Smith, might not have the disease, according to the February 18, 2006 LA Times.

These trials broadened the market for MS drugs but, critics say, put patients who don’t need powerful new medicines at risk, the Times wrote.

“People with no active disease — in other words, people who are doing fine — shouldn’t be given an experimental drug with unknown risks,” said Stanford University neurology professor Lawrence Steinman, a co-inventor of Tysabri who has previously spoken out about the drug’s dangers.

Steinman and another Stanford neurologist, Annette Langer-Gould, urged the FDA to tighten criteria for selecting patients in MS drug trials, according to the Times. “We are concerned that not only were patients put at risk by Tysabri, but we feel that the risk was absolutely unnecessary to assume,” they said in an e-mail to the agency.

The drug makers are losing mega bucks every day the drug remains off the market. Despite an annual price tag of $23,500, by the time the Tysabri was withdrawn after a mere 4 months on the market, 5,000 patients were on the drug and 15,000 more were awaiting insurance verification for the first dose, according to the February 18, 2006 LA Times.

Biogen and Elan want their money maker back on the market. The FDA has hearings on the drug scheduled for March 7 and 8, 2006. and is expected to determine whether the Tysabri can return to the market by the end of March.

It remains to be seen how many more people will turn up injured by Genentech and Biogen through illegal marketing schemes perpetrated on unsuspecting patients.

Filed under: 2006, Biogen, Genentech, prices, Rituxan, Tysabri, whistleblower

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