Celgene Settles Case Alleging Marketing Violations for $280 Million

Violations focused on promotion of Thalomid and Revlimid

Celgene Corporation has agreed to pay $280 million to resolve allegations that it sold and promoted its drugs thalidomide (Thalomid) and lenalidomide (Revlimid) in violation of federal and state laws.

“Celgene has denied any wrongdoing in this matter, but is settling to avoid the uncertainty, distraction, and expense of protracted litigation,” Celgene said in a statement. “Celgene contends, and has contended throughout the litigation, that Thalomid and Revlimid are medical breakthrough medicines that have benefitted patients with serious illnesses; that physicians prescribed these medicines based on their independent medical judgment; and that Celgene's relationships with physicians have been appropriate, and have helped to advance patient care and science.”

The case was brought by a former Celgene sales representative, Beverly Brown, under the federal False Claims Act (FCA) and state analogues.  The federal civil settlement agreement encompasses allegations that Celgene promoted Thalomid and Revlimid for off-label uses that were not approved by the FDA, were in many cases unsafe, and were not properly reimbursable by federal insurance programs. The suit also alleged that Celgene offered kickbacks in an effort to influence health care providers to select its products for use, regardless of whether they were reimbursable by federal or state health care programs or were medically necessary. 

The settlement encompasses allegations that Celgene concealed or downplayed adverse events associated with use of Thalomid and Revlimid and that the company improperly influenced the content of published drug compendia entries, medical literature, clinical studies, and NCCN guidelines for Thalomid and Revlimid to support uses of these drugs not supported by medical science.

In December 2016, U.S. District Judge George King issued an order in Los Angeles allowing the case to proceed to trial against Celgene on claims of off-label promotion. Judge King noted that "Celgene understood that its promotional efforts were successful in causing physicians to write prescriptions."  His opinion also said 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."

However, Celegene noted, the judge dismissed a significant part of the case on a motion for summary judgment, including allegations that Celgene illegally paid doctors to induce them to promote and/or prescribe Thalomid and Revlimid.

Celegene said the litigation related primarily to allegations that Celgene promoted Thalomid for off-label uses before its 2006 FDA approval for newly diagnosed multiple myeloma. Under the settlement, Celgene will pay a total of $280 million to the United States, 28 states, the District of Columbia, and the City of Chicago to resolve the litigation. Celegene noted that the Department of Justice and the other governmental entities declined to intervene in the litigation.

Ms. Brown brought her case in 2010 and it remained under seal—and under investigation by the government—until 2014, when the government decided not to pursue the case. She then pursued the case on her own. The $280 million resolution marks the second largest recovery in a non-intervened FCA case, largest recovery against a pharmaceutical company in a non-intervened case where core allegations were based on off-label promotion, and largest recovery involving a manufacturer of cancer drugs, according to Ms. Brown’s attorneys.

Originally passed by Congress and signed into law in 1864, modern-day federal and state false claims acts allow whistleblowers (known as "relators) to bring suit in the name of government against individuals or entities that caused the fraudulent or improper expenditure of government monies.

The litigation involved the review of millions of documents, numerous discovery motions, roughly 40 depositions, and analysis by medical experts, pharmaceutical economics experts, and conflicts of interest and medical ethics experts. 

Source: Guttman, Buschner & Brooks PLLC; July 25, 2017; Celgene; July 25, 2017.