3 Companies Reach False Claims Act Settlement With DOJ: Biotech's Latest Mishaps

by: The Burrill Report

Abbott Laboratories (NYSE:ABT), B. Braun Medical, and Roxane Laboratories (known today as Boehringer Ingelheim Roxane) have agreed to pay $421 million to settle False Claims Act allegations, the U.S. Department of Justice said. The settlements resolve claims by the United States that the companies engaged in a scheme to report false and inflated prices for numerous pharmaceutical products knowing that federal healthcare programs relied on those reported prices to set payment rates. The actual sales prices for the products were far less than what defendants reported, DOJ said. Roxane is paying $280 million to resolve claims against it and related entities. Abbott is paying $126.5 million to resolve the claims against it in two qui tam cases. B. Braun Medical has agreed to pay $14.7 million to resolve allegations.

Postmenopausal women who take aromatase inhibitors as a treatment for breast cancer may be at an increased risk for developing cardiovascular disease, according to the results of a review of previous studies presented at the 33rd Annual CTRC-AACR San Antonio Breast Cancer Symposium. The review indicates that women presenting with breast cancer treatment who have risk factors for cardiovascular disease should be considered for a shorter duration of use of aromatase inhibitors. Because some cancers, especially breast cancers, require estrogen to grow and spread, drugs that block estrogen production are often used to treat the disease. Tamoxifen blocks the effect of estrogen in breast tissue, whereas aromatase inhibitors prevent the production of estrogen. Pfizer (NYSE:PFE), AstraZeneca (NYSE:AZN), and Novartis (NYSE:NVS) all produce aromatase inhibitors.

Johnson & Johnson’s (NYSE:JNJ) McNeil Consumer Healthcare division has recalled its Softchews Rolaids antacids after the discovery of foreign material including wood and metal particles in the tablets in Canada. The company said an investigation has determined that the materials were potentially introduced into the product during the manufacturing process at a third party manufacturer. It calls the risk of serious adverse health consequences remote but advised consumers who have purchased these recalled products to discontinue their use.

Pfizer said that it is voluntarily withdrawing Thelin (sitaxentan) for the treatment of pulmonary arterial hypertension in regions where it is approved (the European Union, Canada and Australia). In addition, Pfizer is discontinuing clinical studies of Thelin worldwide. The Wall Street Journal reported sales of Thelin for the first nine months of 2010 reached just $44.4 million. Pfizer's said its decision was based on a review of emerging safety information from clinical trials and post-marketing reports. While liver toxicity is a known complication of the class of drugs to which Thelin belongs, a new potentially life-threatening idiosyncratic risk of liver injury with Thelin has been observed. Given the availability of alternate treatments, Pfizer has concluded that the overall benefit of Thelin no longer outweighs the risk in the general population of PAH patients.

bioMérieux said that it will eliminate 100 jobs as it shuts down production at its site in Portland, Oregon in the second half of 2011 as part of a restructuring of its culture media business in the U.S. and Canada. The company will phase out the manufacturing of its prepared media for clinical applications and will transfer the production of all other products manufactured at its Portland site to other locations. The site became part of bioMérieux two years ago when it acquired PML Microbiologicals. The company said the production of routine prepared media products at the Portland site, which represent $9 million in annual revenues, will be discontinued.

Enzon Pharmaceuticals (NASDAQ:ENZN) said it will eliminate 33 positions or 26 percent of its workforce by April 15, 2011. In a filing with securities regulators, the company said it will take a charge because of the workforce reduction plan of between $2.8 million to $3 million. The decision follows the sale in January 2010 of the company’s specialty pharmaceutical business and its transition to being a biopharmaceutical company dedicated to the discovery and development of cancer drugs. Enzon expects to begin realizing savings during the first quarter of 2011 as employees begin departing. Once the workforce reduction is fully implemented, Enzon expects it will generate expense savings at the annual rate of approximately $5.3 million.

Cephalon (NASDAQ:CEPH) said Frank Baldino, Jr., the company's chairman and CEO, will not be resuming his duties at the company in 2010. He will remain on a medical leave of absence indefinitely. J. Kevin Buchi, the company's COO, will continue to perform Baldino's day-to-day responsibilities pending his return.