Celgene Reaches $280 Million Settlement in Whistleblower Lawsuit Over Off-Label Marketing of Cancer Drugs

New Jersey-headquartered Celgene Corporation will pay $280 million to settle claims that it cited non-FDA approved uses in its promotion of cancer treatment drugs Thalomid and Revlimid. The biotech giant decided to settle after a judge ruled last December that the case was fit to proceed to trial.

Judge George H. King believed the plaintiff had provided sufficient evidence that Celgene was promoting the drugs for uses the Food and Drug Administration had approved neither Thalomid nor Revlimid for.

As a consequence, the government ended up paying hundreds of thousands of dollars for “off-label” prescriptions. 

Not Just Off-Label Marketing but Kickbacks Too?

Both Thalomid and Revlimid are approved for use in cases of myeloma, but Celgene’s promotion went far beyond that in its claims of the drugs’ benefits for cancer patients. Celgene not only pitched the drugs to physicians making claims about off-label uses, but it also allegedly paid kickbacks to ensure the drugs would be abundantly prescribed.

Due to the off-label marketing, Celgene allegedly submitted false claims to Medicare in 28 states and the District of Columbia. Government health programs only cover drug prescriptions for FDA-approved uses, which rendered the company’s related Medicare (and Medicaid and MediCal – California’s Medicaid program) billings fraudulent.

Celgene settled the case without any admission of guilt, and it will pay the federal government $259.3 million, $4.7 million to California, and $16 million to the rest of the affected states.  

Whistleblower Beverly Brown Exposed Celgene Misconduct

The misconduct was first brought to light by whistleblower Beverly Brown, who used to be a sales manager at Celgene. Brown started working there in April 2001. In 2007, she received orders from her supervisor to phone doctors and instruct them to change the billing codes for certain prescriptions. She objected, to no avail, because she suspected the practice was illegal.

After double-checking with the FDA, she decided to file a lawsuit under the qui tam provisions of the False Claims Act. 

Brown’s complaint alleged Celgene promoted both Thalomid and Revlimid for various unapproved uses, and invoked federal and state laws that rendered the company’s connected billings to Medicare and Medicaid fraudulent.

Celgene tried to obtain a summary judgment (basically, a court decision without a trial) on the basis that the lawsuit had no merit, but Judge King disagreed and let the case move forward.

“Brown’s evidence shows that Celgene engaged in a systematic campaign to promote off-label uses of Thalomid and Revlimid, that physicians who received more promotional contacts prescribed at a higher rate than those who received fewer contacts, that Celgene knew its promotional activities were delivering results, and that marketing to doctors is generally effective,” the judge stated in his ruling.

Commenting on the outcome of the suit, Acting United States Attorney Sandra R. Brown commented, “Patients deserve to know their doctors are prescribing drugs that are likely to provide effective treatment, rather than drugs marketed aggressively by pharmaceutical companies.”

For OIG-HHS Special Agent Christian Schrank the $280 million recovery “spotlights the importance of the False Claims Act in preserving precious government health plan resource,” and in fighting, “the battle against fraudulent health care schemes.”

As per the False Claims Act’s provisions, Beverly Brown stands to receive a multi-million dollar whistleblower reward; typically between 15 and 30 percent of the total recoveries.

We are working on a number of stories on off-label marketing and physician kickbacks. If you are a pharma sales rep or other healthcare industry employee with information we want to hear from you at [hidden email]

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