Consumer Fraud

Celgene Pays $280 Million To Settle Whistleblower Lawsuit

whistleblower award shutterstock 615750110 339x210 Celgene Pays $280 Million To Settle Whistleblower LawsuitCelgene Corp. has agreed to pay the U.S. $280 million to settle a whistleblower lawsuit alleging the pharmaceutical company defrauded Medicare and several state health care programs by promoting two drugs for purposes unapproved by federal regulators.

According to the office of Sandra Brown, Acting U.S. Attorney for the Central District of California, the New Jersey-based drug company promoted the cancer treatment drugs Thalomid and Revlimid for off-label uses that the U.S Food and Drug Administration (FDA) never approved and which were not covered by federal health care programs.

But it was Celgene’s promotion of Thalomid, a drug originally prescribed for morning sickness in the 1950s and 1960s that was most troublesome, the Associated Press reported. Also known as thalidomide, the drug was linked to severe birth defects so it fell out of use. In 1998, the FDA approved Thalomid for use in treating leprosy.

Still, the drug would only be effective in treating just a small fraction of the few hundred leprosy cases diagnosed in the U.S. each year, so Celgene allegedly set out to expand its use by pushing it as a cancer drug.

Physicians may prescribe drugs for unapproved purposes if they think it will benefit the patient, but drug companies are not allowed to promote their drugs for off-label uses. Despite the law, Celgene actively promoted Thalomid as a treatment for blood cancers and tumors, the AP reported.

The whistleblower lawsuit also alleged that Celgene made false and misleading statements about the drugs and paid kickbacks to physicians who agreed to prescribe the drugs as Celgene directed. A federal judge tossed that part of the lawsuit last year but allowed the marketing allegations to proceed.

According to the AP, Beverly Brown, a former immunology specialist trained by Celgene to promote Thalomid and Revlimid as cancer therapies, brought the lawsuit under the whistleblower provisions of the False Claims Act.

“Their use in off-label indications was tantamount to human experimentation,” Ms. Brown’s lawyers asserted in court documents, the AP said. “Celgene compounded this by instructing its sales representatives to conceal the drugs’ risks, including most notably the potential for lethal blood clots.”

In a July 25 announcement, the U.S. Attorney’s Office said that Celgene will pay $259.3 million to the U.S. and $20.7 million to the 28 states and the District of Columbia, whose Medicaid programs paid for unapproved uses of the Celgene drugs.

Ms. Brown could receive up to $70 million as a whistleblower award for bringing the case and the giant recovery. At the very least, she will receive an award of $40 million – or 15 percent of the total recovery.