Consumer Fraud

Celgene’s bid to have whistleblower case tossed is invalid, U.S. argues

osha whistle Celgene’s bid to have whistleblower case tossed is invalid, U.S. arguesThe U.S. government threw its support behind a whistleblower lawsuit filed under the False Claims Act against drugmaker Celgene Corp. after the defendant asked a California federal court to throw out the complaint.

The lawsuit, filed in 2010 by former Celgene sales representative Beverly Brown, alleges the company illegally marketed its cancer drugs Thalomid and Revlimid for off-label uses and then submitted reimbursement claims to Medicare and Medicaid for the prescriptions. Only drugs that are prescribed for purposes approved by the U.S. Food and Drug Administration (FDA) are reimbursable by federal health care programs. Drugs sold for off-label or “unapproved” purposes are not. Turning in claims for unapproved drugs to Medicare and Medicaid amounts to a submission of false claims.

The lawsuit also alleged the company paid illegal kickbacks to doctors, a violation of the federal Anti-Kickback Statute, which prohibits inappropriate financial relationships between doctors and drug manufacturers.

Celgene argued the court should toss the whistleblower suit because it failed to allege that providers hadn’t certified that their reimbursement claims for the off-label Thalomid and Revlimid prescriptions were lawful.

According to Law360, the U.S. government, which has not intervened in the case, nevertheless weighed in on Celgene’s motion, saying that the company’s move for dismissal of the case was premature and based on a faulty theory about what makes a false claim.

“Whether the provider ‘certified’ on the claim for payment that the prescribed usage was ‘on-label’ or otherwise reimbursable is irrelevant,” the U.S. argues. “Rather, the core question for ‘falsity’ under the False Claims Act is whether the government received a claim … that was not legally reimbursable.”

“It’s pretty clear to us that this case merits litigation, discovery and ultimately trial on the merits,” a lawyer for Ms. Brown told Law360. “We feel we have a very compelling complaint against Celgene, and this company needs to be held accountable for its marketing misdeeds.”

The U.S. Justice Department and the Department of Health and Human Services have ramped up their oversight of Medicare and Medicaid claims in recent years. Vital to that effort is the False Claims Act, which contains “qui tam” or whistleblower provisions that allow private individuals with knowledge of fraud and other wrongdoing to sue on behalf of the U.S. government. Whistleblower lawsuits have helped the U.S. recover and return billions of dollars to the taxpayer-funded programs.

Whistleblowers whose lawsuits result in a recovery receive up to 30 percent of the recovered funds as a reward.


Law 360