Celgene to Pay $280 Million to Settle Fraud Suit Over Cancer Drugs

New York Times | By Katie Thomas |

The pharmaceutical company Celgene has agreed to pay $280 million to settle claims that it marketed the cancer drugs Thalomid and Revlimid for unapproved uses, the company said on Tuesday.

Under the terms of the settlement, which resulted from a lawsuit filed by a whistle-blower — a former sales representative at Celgene — the company will pay $259.3 million to the United States and $20.7 million to 28 states and the District of Columbia.

The Celgene settlement is the latest in a string of multimillion-dollar fines that pharmaceutical companies have paid to settle charges that they inappropriately marketed certain drugs in recent years, but this case is one of the largest settlements to involve a cancer drug, said Reuben A. Guttman, who represented the whistle-blower, Beverly Brown.

Cancer drugs are seen as more difficult to pursue in so-called off-label marketing cases in part because oncologists often prescribe drugs for unapproved uses in an effort to combat a deadly and still mysterious disease.

“The company got the idea that it could be fast and loose with what it was saying about its drug because it was selling to cancer patients who might be in need,” Mr. Guttman said. “At the end of the day, what this is about is that even when you’re on life’s edge,” he added, a company “can’t break the law by off-label marketing a drug.”

Brian Gill, a spokesman for Celgene, which is based in New Jersey, said in a statement on Tuesday that the company denied any wrongdoing and said it was “settling to avoid the uncertainty, distraction, and expense of protracted litigation.”

He noted that, before the settlement, a federal judge had dismissed a portion of the case that claimed that Celgene had illegally paid doctors to induce them to prescribe Thalomid and Revlimid, and he said that the company stood by the significance of its drugs, which he described as “breakthrough medicines.”

By 2016, Revlimid, which was closely related to Thalomid, was Celgene’s leading product, bringing in nearly $7 billion in sales. Thalomid’s sales in 2016 totaled $152 million, according to the company. The company’s shares were down 1 percent at the close of the stock market on Tuesday.

The settlement is the most recent chapter in the story of thalidomide, the notorious drug that was developed by a German company and marketed around the world in the 1950s as a sedative and anti-nausea treatment. In the 1960s, following discoveries that the drug caused horrific birth defects, thalidomide was pulled from pharmacy shelves worldwide. Although the drug was not approved in the United States, the thalidomide crisis led to the overhaul of the nation’s drug-approval process, including the requirement that companies prove a drug is not just safe but also effective.

In 1998, the Food and Drug Administration approved it for use in patients with a complication of leprosy, albeit with severe restrictions intended to prevent it from getting into the hands of pregnant women. Celgene called it Thalomid. Even though it was approved for a rare condition, many in the medical community expressed hope it could soon be used to treat a broader range of conditions, from cancer to autoimmune diseases and AIDS, according to news reports.

Sales of Thalomid quickly took off, in part because — as Ms. Brown claimed in her complaint — Celgene “flooded the country” with sales representatives who were under heavy pressure to pitch the drug to oncologists for a variety of cancers. The F.D.A. sent Celgene two warning letters, in 1998 and 2000, claiming the company had been marketing the drug to treat cancer. In 2000, one Wall Street analyst estimated that 90 percent of Thalomid’s sales were to treat cancer, according to Ms. Brown’s complaint.

Doctors have leeway in deciding which drugs to prescribe, but pharmaceutical companies are supposed to promote their products only for uses that are approved by the F.D.A.

Celgene did not gain approval to market Thalomid as a cancer treatment until 2006, when the F.D.A. cleared it to promote the drug for multiple myeloma.

In 2005, even before Thalomid received its approval for use in cancer patients, it was Celgene’s leading product, bringing in $387.8 million in net sales, according to the company’s financial statements.

Also in 2005, the company received approval to sell Revlimid for a rare cancer, and Ms. Brown’s complaint claims that the company — as it had with Thalomid — marketed it to treat a broader range of cancers. It also pressured doctors to switch Thalomid patients to Revlimid, which is more expensive.

Ms. Brown’s complaint also claimed that Celgene’s inappropriate marketing of Thalomid exposed patients to heightened risks that included potentially fatal blood clots and other side effects. Those risks were added to the drug’s warning label only after it received the approval for cancer treatment, Mr. Guttman said.

The settlement was reached after federal prosecutors declined to intervene in the case, although they continued to monitor it. Under the federal False Claims Act, private citizens like Ms. Brown can bring a suit against companies in the United States and share in any recovery. The amount of her reward has not yet been determined, Mr. Guttman said.

Celgene is expected to pay the settlement on Wednesday, the Justice Department said.

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YEAR OF THE WHISTLEBLOWER?

Whistleblowers and the people and organisations that support them have been making waves  and making news for decades. Finally, they’re making laws.

Over the past two years, many countries throughout the world have passed new or strengthened existing laws to protect whistleblowers from retaliation, and to help ensure that their efforts to disclosure corruption, fraud and other crimes result in needed reforms.

From Luxembourg to Vietnam, from South Korea to the US, and from Peru to Jamaica, countries in all regions of the world are granting new and expanded legal protections to people who expose a wide range of crimes. In many more countries – Australia, Canada, Colombia, Guatemala, IndiaIreland, Lebanon, Nigeria, Pakistan and Taiwan, to name just a few – new or improved whistleblower protection laws are actively under consideration or being proposed.

The latest major breakthrough came in November, when US President Barack Obama signed into law the Whistleblower Protection Enhancement Act, which will provide new legal shields for federal employees – including protection for government scientists who challenge censorship, and for employees who challenge the consequences of the government’s policy decisions.

Thirteen years in the making, this victory was pushed over the top thanks to an extraordinary grassroots campaign by the Government Accountability Project, the Project on Government Oversight and the public radio programme “On the Media”.

And, last month, the European Commission – acknowledging input from TI and our friends at Public Concern at Work – passed new whistleblower guidelines for EU staff members, including a critical provision that requires managers to prove that any actions taken against employees were not motivated by whistleblowing.

Why are whistleblower protection laws important? Without them, citizens can be fired, suspended, harassed or otherwise retaliated against for exposing wrongdoing. In extreme cases, they and their family members are threatened, beaten or even killed – as in the case of an Indian whistleblower named Lingaraju, who was hacked to death in front of his wife while they were fetching water near their home on November 20.

Why are whistleblowers important? Worldwide, they have saved millions of lives, helped to recover billions of dollars in stolen and lost funds, saved precious environmental resources, and exposed all manner of cases of corruption, tax evasion, financial crimes and human rights violations gone undetected or ignored by official authorities.

According to a 2012 survey by Ernst & Young, 40 percent of respondents worldwide identified whistleblowing as a highly effective tool for detecting wrongdoing. According to KPMG India, nearly 30 percent of all fraud detected in the country has surfaced due to the anonymous whistleblower.

The oldest whistleblower law in the world – the US False Claims Act ­– has been credited with securing tens of billions of dollars in fines and stolen funds. An all-time record $4.9 billion in settlements and judgments was secured by the US Justice Department in 2012 under a whistleblower law that allows citizens to expose corruption and bring it to the attention of federal investigators. The figure topped the previous record by more than $1.7 billion, and brings total recoveries under the False Claims Act since 2009 to $13.3 billion – the largest four-year total in history, and more than a third of total recoveries since the law was amended in 1986.

These huge successes led Reuben Guttman, one of the top whistleblower attorneys in the US, to proclaim, “2012 can be looked upon as the year of the whistleblower.”

The international whistleblower movement is now at the point of no return. Activists around the world are demanding legal rights and protections for whistleblowers – and they’re winning in record numbers. As these protections expand, whistleblowers will have greater assurances that if they come forward and report wrongdoing, they will not suffer the consequence of committing the truth.

Source: https://blog.transparency.org/2013/01/15/whistleblower-laws-hitting-the-books-and-whistleblowers-winning-cases-in-record-numbers/



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