The protracted Celgene off-label marketing whistleblower case ended abruptly yesterday as the pharma company agreed to a $280 million payout.
The case began in more than seven years ago, when former Celgene sales manager Beverly Brown sued, alleging improper, off-label marketing of its multiple myeloma drugs Thalomid and Revlimid. The whistleblower contended Celgene pressured its sales team to hype both drugs to oncologists for a variety of other cancers.
At $280 million, the False Claims Act settlement is among the larger in recent years, when marketing penalties have more often run in the double digits. Last year, Pfizer and its Wyeth subsidiary agreed to pay $784 million in a longstanding Protonix case, which involved Medicaid pricing claims. In January 2017, Shire said it would shell out $350 million to settle “flagrant” Dermagraft kickback allegations.
In a statement, Celgene denied any wrongdoing and said it settled “to avoid the uncertainty, distraction, and expense of protracted litigation.”
Though the DoJ’s marketing prosecutions lately have focused on kickbacks, the Celgene case is a straight-up off-label marketing lawsuit. Brown alleged that Celgene used sales meetings to train its reps to market Thalomid and Revlimid for cancers it wasn’t approved to treat. Celgene reps allegedly touted studies that, according to Brown, failed to provide adequate scientific evidence to support those off-label uses. Brown also claimed that the initial label on Thalomid didn’t include warnings related to its use in cancer, which she alleges made the off-label prescriptions “tantamount to ongoing human experimentation.”
The law firm representing Brown issued its own statement claiming victory in the FCA case, which was unsealed in 2014 after the Department of Justice decided not to join in. Celgene asked a federal court in Los Angeles to toss the case, but the judge there allowed it to proceed.
“In an era where drug prices are out of control and too many people are prescribed unnecessary medications, cases like Celgene function as critical oversight of industry which purportedly serves a healthcare function but way too often is driven by Wall Street goals,” said Reuben Guttman of Guttman, Buschner & Brooks.
In 2014, Judge George King chided Celgene for trying to get the case thrown out, contending that Brown’s complaint provided adequate evidence of wrongdoing. As King put it, “as a direct participant in Celgene’s off-label promotion, Brown sets out the particular workings of a scheme that was communicated directly to her by those perpetrating the fraud.”
Celgene said the $280 million will be paid to “the United States, 28 States, the District of Columbia, and the City of Chicago to resolve the litigation.”
Guttman told The Wall Street Journal he expects Brown to receive 25% to 30% of the settlement, but didn’t yet know the exact amount.
The settlement closes all claims made and does not require Celgene to agree to a corporate integrity agreement. It comes as Celgene’s Revlimid faces another lawsuit filed recently by a multiple myeloma cancer patient accusing the company of price gouging.
Revlimid is already a megablockbuster for Celgene with sales of $5.18 billion in 2015, but also tops FiercePharma’s list of projected best-selling cancer drugs of 2022 with expected sales of more than $15 billion in annually that year.
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