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Celgene Pays $280 Million to Settle Allegations of Rampant “Off-Label” Drug Promotion

revlimid-celgene-300x237Celgene Corporation, a pharmaceuticals manufacturer headquartered in Summit, New Jersey will pay $280 million to settle fraud allegations related to the “off-label” promotion of two cancer treatment drugs for uses not approved by the Food and Drug Administration (“FDA”). Celgene is a biopharmaceutical company involved primarily in the development of therapies for the treatment of cancer and inflammatory diseases.

The settlement resolves a lawsuit that alleged Celgene violated the federal False Claims Act by submitting false claims to Medicare. The suit also alleged that Celgene violated the laws of 28 states and the District of Columbia by submitting fraudulent claims to state healthcare programs.

The Celgene litigation was initiated under the qui tam (“whistleblower”) provisions of the False Claims Act and similar whistleblower laws of the District of Columbia and 28 states.

Under the False Claims Act, citizens may bring suit on behalf of the United States and share in any recovery. In 2016 alone, the U.S. government recovered over $3 billion in either settlements or judgments in fraud cases brought under the False Claims Act.

The suit was filed by Beverly Brown, who was employed as a sales manager by Celgene. The suit was first “sealed,” or filed in secret, as all FCA cases are. Once unsealed, the company learned that the complaint alleged that Celgene promoted two cancer drugs, Thalomid and Revlimid, for off-label uses that were not approved by the FDA, that were in many cases unsafe, and that were not reimbursable by federal insurance programs.

The complaint also alleged that Celgene offered illegal kickbacks to a wide range of health care providers in an effort to influence them to select its products for use, regardless of whether they were reimbursable by federal or state healthcare programs, and in violation of anti-kickback laws.

Ms. Brown alleged that Celgene concealed or downplayed “adverse events” associated with use of Thalomid and Revlimid and improperly influenced the content of published medical literature, clinical studies, and guidelines for Thalomid and Revlimid to support uses of these drugs not supported by medical science, including by making payments to physicians who had influence over the content of published content.

In his opinion, Federal District Court Judge King noted that “Celgene understood that its promotional efforts were successful in causing physicians to write prescriptions.” The Judge also stated that “hundreds of thousands of claims for off-label uses of Thalomid and Revlimid were submitted to Medicare and other government programs during the time when Celgene was promoting these drugs off-label.”

Celgene will pay $259.3 million to the United States and $20.7 million to the 28 states and the District of Columbia.

Ms. Brown will receive approximately 15-30% of the total settlement in fulfillment of her statutorily-entitled “whistleblower” share. Pursuing the case on her own, the $280 million resolution is the second largest recovery in a non-intervened False Claims Act case.

In the late 1990s, founding Greene LLP Partner Tom Greene was one of the first attorneys to successfully litigate a multi-hundred million-dollar False Claims Act suit using an “off-label promotion” theory of recovery. Plaintiffs suing drug companies and medical device companies like Ms. Brown have benefitted, and will continue to benefit, from Greene LLP’s novel theories of liability.

In evaluating one’s potential claims of False Claims Act fraud, consulting an experienced whistleblower attorney or an attorney who specializes in the False Claims Act will help evaluate and guide a potential whistleblower’s claim.

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