Celgene Settles Lawsuit Over Improper Promotion of Cancer Drugs
July 25 2017 - 5:51PM
Dow Jones News
By Peter Loftus
Drugmaker Celgene Corp. agreed to pay $280 million to the U.S.
and many state governments to settle a former sales manager's
lawsuit accusing the company of improperly promoting two cancer
drugs and causing false reimbursement claims to be submitted to
federal and state health-insurance programs.
Celgene, of Summit, N.J., didn't admit liability in the
settlement and said Tuesday it denies any wrongdoing. The company
said it settled the case to avoid the uncertainty and expense of
protracted litigation.
The settlement stems from a lawsuit initially filed in 2010 in
federal court in Los Angeles by former Celgene sales manager
Beverly Brown, alleging the company marketed the drugs Thalomid and
Revlimid to treat multiple types of cancer for which the drugs
weren't approved by the U.S. Food and Drug Administration, such as
cancers of the brain and breast.
Doctors are allowed to prescribe drugs for uses not approved by
the FDA, a practice known as off-label prescribing. But the FDA has
generally prohibited companies from marketing their drugs for
off-label uses.
The FDA initially approved Thalomid to treat leprosy in 1998. In
2006, the FDA approved widening Thalomid's uses to include
treatment of the blood cancer multiple myeloma.
The FDA initially approved Revlimid in 2005 to treat a blood
disorder but later expanded the approved uses to include treating
multiple myeloma. Global sales of Revlimid have surged, to $6.97
billion last year, or more than 60% of total company revenue.
In her lawsuit, Ms. Brown alleged her superiors at Celgene
instructed her and other sales employees to promote to doctors
various off-label uses of the drugs, and that she was rewarded for
it in her compensation. The lawsuit alleged the marketing
activities caused doctors to write prescriptions for the drugs that
government health programs such as Medicare shouldn't have paid
for, but did.
"This case was about the marketing of dangerous drugs being
driven by Wall Street promises and not medical necessity," said Ms.
Brown's attorney, Reuben Guttman.
Ms. Brown filed her lawsuit under the False Claims Act on behalf
of the U.S. and many state governments. The False Claims Act allows
people bringing such lawsuits to receive up to 30% of any monetary
recoveries, to encourage people with knowledge of suspected fraud
to come forward. The Justice Department has the option to intervene
and take the lead in such lawsuits, but in this case it didn't
intervene. Instead, it monitored the case, the U.S. Attorney's
Office for the Central District of California said in a press
release.
Mr. Guttman said he expects Ms. Brown to receive 25% to 30% of
the settlement amount, but said he didn't yet know the exact
amount.
Celgene will pay $259.3 million to the federal government and
$20.7 million to be split among 28 states and the District of
Columbia.
Celgene said that before it reached the settlement, a federal
judge had dismissed part of the case, including allegations that
Celgene illegally paid doctors to induce them to prescribe Thalomid
and Revlimid.
Write to Peter Loftus at peter.loftus@wsj.com
(END) Dow Jones Newswires
July 25, 2017 18:36 ET (22:36 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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