A federal judge in California has ruled that a multi-billion dollar whistleblower lawsuit against biotech giant Celgene Corp. can proceed to a jury trial. The complaint alleges that Celgene marketed two drugs for unapproved uses, causing the government to pay for hundreds of thousands of “off-label” prescriptions. Judge George H. King, of the Central District of California, wrote in an order that former employee Beverly Brown had provided solid evidence to support her claim that Celgene promoted Thalomid and Revlimid for use in cancer patients. The U.S. Food and Drug Administration (FDA) had approved the drugs only for other purposes, and the company was not permitted to market it to doctors for unapproved, or off-label, uses. Judge King wrote:
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. In addition, Brown presents evidence that hundreds of thousands of claims for off-label uses of Thalomid and Revlimid were presented to government healthcare programs during the years when Celgene was engaged in off-label promotion of these drugs, that Celgene knew Medicare would be called upon to pay for many of these prescriptions, and that Celgene played an active role in facilitating the submission of certain claims.
The biotech company had argued that the whistleblower could not identify a particular claim that was submitted as a result of its off-label promotion. But the court said that Ms. Brown is not required to do so, and that her case can go forward. “False claims were presented as a result of Celgene’s conduct,” Judge King wrote. The judge also dismissed Celgene’s argument that government health care programs were aware of the off-label uses and continued to reimburse them.
Judge King did dismiss some of Brown’s claims against Celgene, narrowing the jurisdiction of the case. An allegation that Celgene provided kickbacks to doctors, which caused submission of claims for off-label reimbursement, was dismissed by the judge. While Ms. Brown was hired by Celgene in April 2001 as an immunology specialist, it appears she actually performed sales work.
Ms. Brown says she became concerned when her manager instructed her to call doctors to ask them to change billing codes associated with prescriptions of Celgene’s drugs. Ms. Brown said she complained to management about the practice, which she thought was illegal. She later contacted the FDA and then hired a lawyer. In 2010, Ms. Brown filed her “false claims” lawsuit against Celgene on behalf of the federal government, 24 states, the District of Columbia, and the City of Chicago.
It’s alleged in the complaint that Celgene illegally promoted Thalomid, which was approved in July 1998 for a rare skin disorder, for a variety of cancer treatments. In May 2006, Thalomid was given a second approval for use, with dexamethasone, in patients with newly diagnosed multiple myeloma. The complaint covers the years 2000 to the present. Celgene won its first approval for Revlimid, in December 2005, for treatment of patients with transfusion-dependent anemia due to myelodysplastic syndromes (MDS). According to the American Cancer Society, about 13,000 people are diagnosed with MDS each year. That drug largely replaced Thalomid. Revlimid’s sales last year were $5.8 billion.
The U.S. Justice Department has not formally joined the case, but it has filed documents supporting its basic arguments. Celgene could be liable for damages for hundreds of thousands of claims submitted to 20 states, Medicare, and other government entities.
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