Healthy Skepticism Library item: 7861
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Publication type: news
The Seattle Times.
Cell Therapeutics agrees to settle in investigation of cancer-drug marketing
The Seattle Times 2007 Jan 24Business & Technology
http://seattletimes.nwsource.com/html/businesstechnology/2003538569_cell240.html
Full text:
Cell Therapeutics said Tuesday it has reached an oral agreement to pay $10.5 million to end the U.S. Attorney’s Office investigation of company practices in marketing the cancer drug Trisenox.
The preliminary agreement doesn’t end the lawsuit that prompted the two-and-half-year federal investigation, the Seattle biotechnology company said in a filing with the Securities and Exchange Commission. The suit was filed under seal by an unidentified person who is apparently a former employee.
“The corporation would not make any admission of wrongdoing as part of this settlement” and would get “a release of all government claims” in the case, Cell Therapeutics said. The company also said it has sued a consulting firm that advised it on Medicare reimbursement.
Trisenox is the only product Cell Therapeutics has brought to market. It was sold to Cephalon in July 2005 for $71.9 million so Cell Therapeutics could finance other drug-development efforts.
In August 2004, the company disclosed that the U.S. attorney in Seattle was investigating whether the company had improperly marketed the drug for unapproved uses. It said investigators were examining Cell Therapeutics’ promotion practices, revenue reporting and statements made by company representatives and consultants regarding Medicare reimbursement for off-label uses of Trisenox.
Cell Therapeutics has previously acknowledged that Trisenox was prescribed by doctors “largely for uses not approved by the FDA.” Doctors can and frequently do write prescriptions for so-called off-label uses, but it’s against the law for drug companies to promote off-label prescribing.
Trisenox was approved by the Food and Drug Administration in September 2000 for acute promyelocytic leukemia, a form of the disease that afflicts just 400 American patients. At a price of $20,000 a patient, that meant the company’s U.S. sales potential was capped at about $8 million a year.
To sell its drug to larger numbers of cancer patients, the company tested Trisenox against multiple myeloma and myelodysplatic syndrome, a pre-leukemic condition. While the company never sought FDA approval for those diseases, it told investors that because doctors could prescribe the drug “off-label” sales might reach $100 million a year.
The company said it sued Lash Group, a unit of pharmaceuticals distributor AmerisourceBergen, over its consulting work on the marketing of Trisenox. “Lash Group was the source of the erroneous and incomplete advice that led to much of the conduct that was the subject of the government’s investigation,” the suit asserts.
A phone message to Lash Group wasn’t immediately returned.
Cell Therapeutics reported $68.1 million in cash and investments at the end of September.
It is spending at a rate of $7 million a month, said spokesman Dan Eramian.
The identity of the person who filed the sealed lawsuit against Cell Therapeutics has not been disclosed, but the company said that the suit includes wrongful-termination claims.
Bloomberg News contributed
to this report.
