Rituxan Whistleblower Lawsuit Ends in $20M Settlement

Genentech has agreed to pay $20 million to settle a whistleblower lawsuit filed over claims that the drug maker aggressively marketed Rituxan for off-label uses and trained sales reps how not to get caught by the FDA while breaking the law. 

The Rituxan lawsuit was brought by John Underwood, a former sales manager, who claimed Genentech showered doctors with money and expensive trips and paid speaking engagements in return for promoting Rituxan for uses that were not approved by the FDA at the time. The company also allegedly held workshops for sales representatives that included tips on how to promote Rituxan off-label without being noticed by the FDA.

Drug companies are only allowed to market drugs for uses approved by the FDA. Doctors, however, can prescribe the drugs for any reason they see fit. When a company actively markets a drug off-label and the Medicare and Medicaid programs pay reimbursements for that drug’s prescriptions, it is considered a form of Medicare fraud.

Underwood accused Genentech of paying thousands of dollars to doctors if they would promote Rituxan off-label. They were also sometimes flown to lavish locations for medical education seminars.

Rituxan (rituximab) is a chimeric monoclonal antibody drug that helps the immune system fight specific types of cells, like lymphoma cancer cells. The drug, which is manufactured by Genentech, Inc. and Biogen Idec, Inc., was approved by the FDA in 1997 for treatment of non-Hodgkin’s lymphoma and rheumatoid arthritis, generating annual sales of about $2.3 billion.

As part of the whistleblower settlement, Genentech did not admit guilt to the charges.

Under the qui tam provision of the False Claims Act, whistleblowers who report a false claim against the government may be entitled to receive a portion of any money that the government recovers. In return, the whistleblower must be the first to bring the case to the government’s attention, and must not publicize the claim until the DOJ decides to prosecute the claim.

The Justice Department ultimately decided not to intervene in the lawsuit, and Underwood will receive approximately $5.7 million of the $20 million Genentech is paying the government to resolve the claim.