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Maker of Growth Hormone Feels Long Arm of Law

In the first ever criminal prosecution of a drug company for violating Food and Drug Administration's (FDA) rules against promoting a drug for unapproved uses, a San Francisco-based drug maker has paid $50 million to settle charges that it illegally promoted a growth hormone. This is one of the biggest penalties ever paid by a drug company.

The company, Genentech Inc., is among the world's largest biotechnology corporations. As part of its plea agreement, approved May 7 in the U.S. District Court for the District of Northern California, Genentech admitted that it aggressively marketed the drug Protropin ® (somatrem for injection) for uses other than the one approved by FDA. Specifically, it illegally marketed Protropin ® for treating children who were short for reasons other than the lack of adequate growth hormone, children with a rare form of juvenile obesity, and a small number of burn patients. FDA had approved the drug only for a rare condition in which children don't grow normally because their bodies lack the ability to make enough growth hormone.

While FDA knows of no injuries connected with the unapproved uses of Protropin ®, it is generally illegal for a drug company to market a drug for unapproved, or "off-label" uses.

"It's a public health issue," says Jud Bohrer, special agent in charge of the Los Angeles field office of FDA's Office of Criminal Investigations. "It's one thing for a physician with medical training to make decisions about the conditions for which they will use a particular drug. But it's quite another matter when a manufacturer actively promotes its drug to treat conditions for which it hasn't been proven safe and effective."

FDA estimated that from 1985, when the drug was approved, until 1994, Genentech got about $158 million in total Medicaid reimbursement for Protropin ® prescriptions and more than $5 million from CHAMPUS, a federal military insurance program. Genentech's financial gain from sales of Protropin ® for unapproved uses was about $20 million, according to FDA's calculations.

FDA began looking into Genentech's marketing of Protropin ® following the June 1991 New York Times article "How Short Is Too Short?" FDA inspected the company in 1992 and, in September 1994, asked the company to turn over all its documents relating to the drug's promotional campaign. Then, starting in 1995 and continuing into this year, FDA and the FBI interviewed people connected with Protropin's ® marketing.

"We interviewed hundreds of people," Bohrer says, "including Genentech sales reps, employees of the company's distributor, Caremark Inc., and others. We asked them the hard questions: 'Who told you to do what to promote the drug? Whom did you contact? What did you tell them?'"

FDA and the FBI also interviewed doctors who received financial incentives for prescribing Protropin ® in the name of studying the drug's effectiveness. These interviews were aimed at determining whether Genentech used "grant programs" as vehicles to pay prohibited kickbacks to doctors who prescribed Protropin ®. This aspect of the investigation was later dropped in favor of focusing on the charges related to Genentech's off-label promotion of the drug.

Based on Genentech's documents and the follow-up interviews, FDA determined that the company started actively promoting Protropin ® for off-label uses not long after the drug's approval. By the end of 1985, Genentech had "gone beyond the bounds of FDA-approved activity," according to the sentencing memorandum submitted to the court, "and begun marketing Protropin ® for use in the treatment of medical conditions for which it did not have FDA approval."

As part of its guilty plea, Genentech admitted that from 1985 until 1994, it aggressively marketed Protropin ® to doctors, hospitals and others for treating conditions that FDA had not approved. For its part, the government agreed that this criminal behavior stopped in 1994. In 1995, Genentech came under new management, which FDA concluded took additional steps to prevent violations of the law, including educating its sales force on proper drug promotion.

The $50 million settlement that Genentech agreed to pay is made up of a $30 million criminal fine plus a $20 million civil penalty to reimburse Medicaid and CHAMPUS, which FDA determined were the main victims of the illegal promotions.

The unprecedented prosecution and fine, said FDA Commissioner Jane Henney, M.D., after the settlement was announced, "sends a clear and strong signal that FDA takes very seriously promotions using illegal means."

Tamar Nordenberg is a staff writer for FDA Consumer.

Serono Inc. Illegal Marketing of Drug, Serostim
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