Celgene agrees one of the largest settlements for false claims on record
It has been announced that Celgene has agreed to settle a case after a whistle-blower launched a lawsuit against the company, claiming it had made false claims to improve sales of two drugs. Celgene ended the case for a total of $280 million but denied any wrong doing regarding its sales practices of Revlimid and Thalomid.
The settlement is in the top 100 fees paid out due to false claims; however, it represents only a tiny fraction of the profits made on the blockbuster Revlimid. The lawsuit alleged that the two drugs were touted to doctors as treatments for cancer outside of the drugs’ indications.
Thalomid was a controversial drug to begin with, being the one of the most notorious drugs in history: thalidomide. The drug was linked to thousands of birth defects after being sold as a safe medication for morning sickness. Celgene picked up the drug and gained an approval in 1998 to treat a complication of leprosy.
Beverly Brown, the whistle-blower who brought the case against the company that she worked for over the course of a decade, alleged that it paid kickbacks to doctors and hired ghostwriters to for new, unapproved indications of Thalomid. The kickbacks part of the claim was later thrown out but the case continued.
The tactics to promote off-label uses paid off for the drug, as it managed to earn $100 million a year after its approval – with 90% of sales being represented by prescriptions for cancer treatment. Brown claimed that this process was later repeated with the follow up drug, Revlimid, that has gone on to become one of the largest selling drugs in the world. Last year, the drug generated $8.4 billion in revenue and the company aims to raise that to $21 billion by 2020.
Both drugs were later approved for indications in cancer but the FDA requires pharmaceutical companies to only promote the drugs based upon approvals in indications that have proved both safe and effective. For instance, Brown claimed that Celgene’s tactics had exposed patients to fatal blood clots and other unknown side-effects through its marketing tactics.
The settlement fee will be split between the federal government, 28 states and the city of Chicago. Brown, for her work in the bringing the case to light, could potentially take 30% of the total fee, under federal false-claims laws. The case was brought against the company in 2010 and Celgene decided to settle the case in order to end the “uncertainty, distraction, and expense of protracted litigation”.
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