Genentech agrees to pay $50 million to end probe

Accused of promoting drug for unapproved uses


April 19, 1999|BY A SUN STAFF WRITER

Biotechnology giant Genentech Inc. has agreed to pay $50 million to settle a criminal lawsuit which alleged that it marketed a human growth hormone for unapproved uses during the 1980s and early 1990s.

The criminal fine and restitution is one of the largest settlements in U.S. drug industry history and ends a Department of Justice investigation that began in 1995.

"We chose to settle the matter in order to avoid the cost and distraction of protracted litigation," Genentech Chief Executive Officer Arthur Levinson said in a statement. "We're pleased to get the issue behind us."

The suit accused Genentech representatives of promoting Protropin, a breakthrough drug for treating dwarfism in children, for unapproved use by children who were short but otherwise healthy. The product, which costs $20,000 per year, was Genentech's first drug and was approved by the U.S. Food and Drug Administration in 1985.

Genentech, based in San Francisco, said it would take a one-time charge for the settlement in its first-quarter earnings, and that the settlement would have no further financial effect.

Pub Date: 4/19/99

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