Major Pharma Scandal: Whistleblowers Claim Popular Asthma Drug Was Marketed Illegally

Personal Health

Asthma is big business for Big Pharma. Advair was the third best selling drug in the world in 2013 and the asthma drugs Singulair and Symbicort were also blockbusters. So it is no surprise the prospect of a high-tech injectable drug that stops an allergic response by binding to Immunoglobulin E (IgE) made Big Pharma sit up and take notice.

Xolair (omalizumab), developed from humanized rodent cells (yes, you read that right), is part of Big Pharma's new wave of bio-engineered liquid drugs, rolled out when blockbusters like Lipitor and Viagra went off-patent. Injected drugs/biologics can earn as much as $20,000 or more per patient per year and are resistant to the quick generic competition that threatens easier-to-replicate pills. Currently biologics Humira and Enbrel are bestselling drugs.

A biologic that could treat asthma sounded so lucrative, Novartis actually sued Genentech, which was developing a similar drug to its own for “trade secret” violations until the drug giants decided to team up and sell Xolair together.

They no doubt regretted their optimism.

Though Novartis and Genentech sought FDA approval for four conditions in 2001—pediatric and adult asthma and pediatric and adult seasonal allergic rhinitis symptoms (SARS)—the FDA only approved Xolair to treat one, in 2013: “moderate to severe persistent asthma” in patients over 12 whose symptoms are “not adequately controlled on inhaled corticosteroids” and who have a positive skin test or reactivity to an allergen.

The limited number of patients who could be prescribed Xolair under this approval was a big disappointment. But so was the reason for the restricted indication: in clinical trials the FDA had detected signs of early stage malignancies! The FDA also detected many anaphylactic responses—life threatening allergic responses—which earned Xolair a black box warning. (Years later, Xolair was also linked to a higher risk of heart attack, mini-stroke, chest pain and blood clots.)

Sleazy Sales Schemes Charged

How do you sell a drug too dangerous for children and too dangerous for seasonal allergic rhinitis symptoms that costs up to $24,000 a year? A drug that can only be used after corticosteroids have failed and a IgE serum test has been conducted? A drug so linked to anaphylaxis it can only be administered in a medical setting where patients have to remain for two hours of observation? (Amounting to four to eight hours of doctor and patient time a month since the drug is given every two or four weeks.)

According to whistleblowers who sold Xolair at Novartis and Genentech--with a scheme of kickbacks and bribes, misinformation about Xolair’s approved uses and risks and insurance fraud.

Novartis, Genentech and Roche (which acquired Genentech in 2009) “determined as early as 2003 that they would never succeed in transforming Xolair into a blockbuster or near-blockbuster drug unless they broke the law," say their complaints. "And that is exactly what they have knowingly done, by aggressively and illegally marketing Xolair, on a national basis, to induce HCPs [health care providers] to prescribe Xolair for wide-ranging use—despite the drug’s very limited efficacy and proven threats to patient safety.”

Heading the list of Novartis/Genentech wrongdoing say whistleblowers is off-label marketing that reps flagrantly conducted at the clear behest of their sales managers and drug company officials.

What is off-label marketing? Disregarding the uses for a drug the FDA has approved and risks it has identified, usually to maximize sales. While doctors can legally use an approved drug in any way, it is illegal for drug companies to make non-FDA approved claims and hide risks. Clearly if they do so there is no reason to have an FDA and we are back to snake oil salesmen days!

Almost from the start, according to sales training modules included in a complaint, Xolair reps were told to use the made-up term “active asthma” when calling on doctors, instead of “moderate to severe persistent asthma,” which would have limited sales.

The ruse worked. Though Xolair was not approved, effective or safe for mild asthma, many patients with only mild asthma which was not persistent were prescribed Xolair, thanks to the contrived term “active asthma,” reps say. Worse, Xolair was often the first drug patients were prescribed, though legally it could only follow treatment with corticosteroids that weren't effective.

Reps were told to assure doctors that a two-hour wait to monitor for anaphylaxis was unnecessary and that patients in some cases could self-administer Xolair at home. In blatant disregard of Xolair's indications and safety profile, reps were even told to call on pediatricians and claim Xolair was safe for children under 12, according to whistleblowers.

Another form of off-label marketing Xolair reps were told to use was showing doctors "studies," often compiled by doctors Novartis and Genentech had paid, that suggested non-FDA uses of Xolair. One suggestions was using "rush immunotherapy"—accelerated exposure of patients to their allergen via injection to shorten treatment—simultaneously with Xolair. But rush immunotherapy is also linked to anaphylaxis, putting patients at double risk.

Kickbacks, Bribes and Free Services

Bribing doctors to extol a drug is a theme that runs through almost all unethical marketing charges. Pfizer, GlaxoSmithKline, Johnson & Johnson, Bristol-Myers Squibb, Eli Lilly and Victory Pharma have all been charged with such inducements and Xolair sales techniques were no exception.

According to complaints, doctors and medical staff who could boost Xolair prescriptions received American Express travelers checks, expensive tickets to sports and entertainment events, opulent meals and even a trip to the Bahamas. Often payments were disguised to look medically related, such as payments for bogus studies and to “advisory board” members, trips to “speaker” programs at fancy country clubs and casinos, unrestricted grants and honoraria of $1,000 to $3,000 that denoted no work.

Nor were monetary gifts the only inducements. Xolair reps also provided free computers, refrigerators, pulmonary function machines, IgE test kits and drug swirlers/spinners to make the use of Xolair easier. Xolair is a cumbersome drug that office nurses or staff would have to prepare, so reps would volunteer to do it for them.

To help doctors get around Medicare and Medicaid restrictions reps recommended "Buy and Bill" arrangements from the specialty pharmacies that provided Xolair which amounted to kickbacks if a patient was denied coverage or didn't show up for treatment. Reps also delivered Xolair to patient's homes.

Reps assisted medical staff in coding and reimbursement, some of which was illegal, say complaints. Because Xolair can cost up to $24,000 a year and doctors have to sign an SMN (Statement of Medical Necessity) to assure private and government reimbursement, sales reps “instructed and nudged” office staff to submit Xolair claims "at improper rates.” The alleged fraud included "upcoding"—calling patients at levels 1-2, 4-5 and other falsifications of  Current Procedural Terminology (“CPT”) and Diagnosis Codes (“ICD-9s”).

Reps were advised to pursue Medicare and Medicaid sales, which were called “soft targets” and $412 million of our tax dollars were estimated to be spent on Xolair from 2004 through 2011. Reps were actually ordered to work in medical settings in poor neighborhoods where patients were more likely to be on Medicaid, say complaints.

Doctors and Patients Paid to Extol Xolair

Novartis and Genentech hired and trained well-regarded doctors to extol Xolair because they are "Key Opinion Leaders" who are thought to influence other doctors say whistleblowers. Williams Busse, with the Allergy, Asthma & Immunology Clinic, Adult & Pediatric at the University of Wisconsin School of Medicine & Public Health was one of the most visible Xolair cheerleaders and received $100,000 in between 2002 and 2003, say complaints.

Novartis and Genentech also maintained a “Patient Experience Program” (PEP) in which patients were paid to praise Xolair. In addition to having their Xolair co-payment waived, PEP participants “are paid cash to speak favorably about Xolair. For example, many patients were flown to Arizona, with all expenses paid and payment of a stipend," charges the complaint. "The patient speakers were also paid for their future speaking events, with travel, hotel, food, and other expenses paid by Defendants.”

How Dangerous Is Xolair?

As anyone reading Xolair warnings could guess, the drug is linked to serious harm and death., a medical analysis website launched in 2008 by a former Deloitte healthcare consultant, identifies 347 deaths among 11,503 Xolair users. identifies 13 Xolair deaths internationally between October 2011 and September 2012. In a 2012 study of 2,274 patients, 222 had serious side effects and 30 were likely deaths, the whistleblowers speculate. Actual deaths are difficult to pinpoint because anaphylaxis is not always listed as the cause of death and it can occur after repeated Xolair use, not at first use. Also, the FDA does not display Xolair warning letters and adverse events on its website for unclear reasons, whistleblowers charge.

Sadly, data about harm to children are more available than adults. A 2011 government Pediatric Postmarketing Adverse Event Review found “81 serious pediatric reports" and five deaths in children 0-16 years of age (though three deaths were linked to prematurity or fetal harm). Just as shocking as exposing children under 12 to Xolair, another Xolair-related study, still in progress, actually explores the effects of Xolair on pregnant women.

Of 169 pregnancies, researchers say there were "156 live births, 1 fetal death/stillbirth [and] 11 spontaneous abortions." Actual harm could be higher, whistleblowers told me, because data are collected by Genentech itself. Overall, "20 infants had congenital anomalies confirmed," researchers say.

No Legal Actions Against Novartis and Genentech Yet

It is hard to believe such a dangerous drug sold with such allegedly illegal and unsavory methods has not had its day in court. Yet, despite an 11-year legal journey that included deposing Novartis and Genentech reps and even "wiring" one to collect evidence, whistleblower complaints have gone nowhere. Judge William Young of Boston tossed out the main complaint a year ago, claiming "fraud was probable," but he did not see particulars that would amount to actual violations of the False Claims Act (FCA). Frank Garcia, one of the whistleblowers, told me the ruling was disingenuous because the particulars Judge Young sought were in a 400-page amended complaint he would not admit.

Since most whistleblower complaints charging kickbacks, off-label marketing and insurance fraud have a day in court if not a settlement, you have to wonder if other factors are at play. Robert Califf, the newly appointed FDA Commissioner, served as "director, officer, partner, employee, advisor, consultant or trustee" for Genentech according to Medscape—a fact that has disappeared from both the Medscape and Genentech sites.

Meanwhile, Xolair is marching along and received an FDA approval in 2014 to treat chronic idiopathic urticaria (CIU), a form of chronic hives which as many as 1.5 million people in the U.S. develop at some point in their life says Genentech. It is the first biologic medicine to treat idiopathic urticaria and is approved for "people 12 years of age and older who remain symptomatic despite treatment with H1-antihistamine therapy," says Genentech.

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