PHILADELPHIA -- A former Genentech Inc. employee has sued the biotechnology company and marketing partner Biogen Idec Inc., accusing them of illegally promoting the cancer drug Rituxan as a treatment for arthritis, a use not yet approved by regulators.

Paul McDermott, who worked for Genentech in Falmouth, Maine, from March 2004 until April 2005, filed a whistle-blower lawsuit in July 2005 in U.S. District Court in Maine alleging the companies' marketing of Rituxan defrauded government health-care programs.

The suit also says Genentech fired McDermott in retaliation for bringing the matter to the attention of Genentech executives. The suit seeks unspecified damages on behalf of the government, and an order that Genentech rehire McDermott and pay him back wages and other damages.

McDermott's lawsuit hasn't surfaced until now because it was filed under seal on behalf of the federal government. In December, however, the Justice Department declined to intervene in the case and requested that the lawsuit be unsealed.

Rituxan is one of biotechnology's top-selling drugs, with $1.8 billion in U.S. sales last year. Studies have shown Rituxan also has potential to treat rheumatoid arthritis. Biogen Idec and Genentech have applied for FDA approval to market Rituxan as such a treatment, and a decision is expected by late February.

While neither Genentech nor Biogen Idec are based in San Diego County, both companies have extensive ties to the local biotech industry.

Rituxan was developed by San Diego's Idec Pharmaceuticals along with Genentech, based in South San Francisco. The U.S. Food and Drug Administration approved Rituxan in 1997 as a treatment for non-Hodgkin's B-cell lymphoma. Biogen Idec was formed in 2003, when Idec merged with Biogen. The merged company is headquartered in Cambridge, Mass., where Biogen was located.

In 2005, Genentech bought for $408 million a large manufacturing plant Biogen Idec had built in Oceanside. Genentech is now preparing the plant to make another cancer drug, Avastin.

Genentech was served with a copy of the suit earlier this month, a Genentech executive said Tuesday after the company reported fourth-quarter earnings.

Genentech spokeswoman Caroline Pecquet said the company hasn't fully evaluated the lawsuit. She said the company was committed to ethical and legal promotional practices.

Officials at Biogen couldn't immediately be reached.

Off-label promotion?

McDermott's lawsuit is the latest legal challenge facing Genentech over Rituxan's marketing. In October 2004, Genentech received a subpoena from the U.S. attorney's office in Philadelphia seeking documents related to the promotion of Rituxan. Genentech is cooperating with that investigation, which it said was both civil and criminal in nature.

The promotion of off-label uses of pharmaceuticals has gotten other drug companies in trouble. In 2004, Warner-Lambert pleaded guilty to federal charges that it promoted epilepsy drug Neurontin for off-label uses beginning in the 1990s. Pfizer Inc., which acquired Warner-Lambert in 2000, agreed to pay $430 million to resolve criminal charges and civil liabilities in the case.

It's generally legal for doctors to prescribe FDA-approved drugs in ways that haven't yet been approved by the FDA, and so-called "off-label" prescriptions are common. But drug companies are generally barred from actively promoting off-label uses of their drugs.

McDermott worked as a "professional educational liaison" for Genentech, according to the lawsuit, a job that involved recruiting doctors to promote the use of Rituxan as a treatment for rheumatoid arthritis.

He alleges Genentech sent sales representatives to the offices of rheumatologists, even though Genentech had no products approved by the FDA for such treatments.

Also, McDermott alleges Genentech and Biogen used "sham" consulting agreements to pay rheumatologists whom the companies identified as being "key opinion leaders," who were expected to influence other doctors to begin prescribing Rituxan for arthritis.

The lawsuit alleges that Biogen had similar marketing practices for the drug.

Staff writer Bradley J. Fikes contributed to this story.

On the Web

Genentech: www.gene.com

Biogen Idec: www.biogen.com

Genentech's local ties: www.nctimes.com/articles/2005/06/26/business/news/10_35_076_25_05.txt

Genentech in Oceanside: www.oceansidebiotech.com