The parent company of OSI Pharmaceuticals, formerly of Melville, and another drugmaker will pay $67 million to settle charges they misled physicians about the effectiveness of a cancer drug, the U.S. Justice Department announced Monday night.
Between January 2006 and December 2011 the companies “made misleading statements about the effectiveness of the drug Tarceva to treat non-small cell lung cancer,” Justice Department officials said in a news release.
“There was little evidence” at the time “to show Tarceva was effective to treat those patients unless they had never smoked or had a mutation in their epidermal growth factor receptor, which is a protein involved in the growth and spread of cancer cells,” the officials said.
Tarceva was developed by OSI, which was founded in part with technology developed at Cold Spring Harbor Laboratory.
The company eventually moved its headquarters to Melville and established a laboratory at Farmingdale State College’s Broad Hollow Bioscience Park.
The promise of Tarceva was a key factor in the 2010 sale of OSI to Japan-based Astellas for $4 billion. Three years later, Astellas moved OSI’s remaining lab to Illinois in a blow to Long Island’s nascent biotechnology industry.
Years before OSI had entered into a partnership with Genentech Inc. of South San Francisco, California to sell Tarceva.
Monday, Astellas and Genentech agreed to settle the False Claims Act allegations brought by former Genentech employee Brian Shields in a whistleblower lawsuit filed in federal court in San Francisco.
Shields will receive $10 million of the $67 million settlement, Justice Department officials said.
Astellas spokeswoman Marjorie Moeling Monday challenged the Justice Department’s version of events, saying the alleged violations occurred “prior to the acquisition of OSI by Astellas in 2010.”
Moeling also said “Astellas is committed to operating with the highest ethical standards and integrity, and to complying with both the letter and spirit of all applicable laws.”
Colin Goddard, CEO of OSI for 12 years, did not immediately respond to a voicemail message left at his new company, BlinkBio in Florida.
Genentech spokeswoman Holli Kolkey said Monday the marketing of Tarceva was “entirely proper and in compliance with the law. This settlement, however, allows the company to avoid the burden, disruption, cost and distraction of protracted civil litigation.”