A Multimillion-Dollar Whistleblower Settlement—with Two Unusual Aspects
Over the past several years, dozens of whistleblower cases involving pharmaceutical companies have been settled, with the largest fine to date levied on GlaxoSmithKline: $3 billion in 2012. While the latest settlement isn’t in the billions, the case includes two attention-grabbing aspects.
The U.S. Department of Justice announced on July 24, 2017, that Celgene Corporation had agreed to settle fraud allegations involving two cancer-treatment drugs by paying $280 million. The case is one of the largest settlements ever involving cancer drugs.
The Basics of the Case
Beverly Brown, a former sales manager at Celgene, brought the qui tam case alleging violations of the federal False Claims Act due to submission of false claims to Medicare. Additionally, the laws of 28 states and the District of Columbia were also allegedly breached with regard to false claims presented to state health care programs, including the nation’s largest, Medi-Cal of California.
Brown claimed that Celgene advocated that Revlimid and Thalomid, two chemically-related drugs, be used as cancer treatments even though they were not approved by the Food and Drug Administration (FDA) to treat the disease; the practice is known as off-label usage. Medicare’s rules do not allow reimbursement for drugs prescribed for off-label uses. Moreover, her suit claimed that the company’s efforts to promote the drugs for off-label uses included kickbacks given to doctors so that they would promote the drugs to others.
Under the agreed-upon terms, Celgene will pay the United States $259.3 million, with an additional $20.7 million to be split among the states and D.C.
What are the Unusual Aspects of the Case?
First, it’s considered more problematical to pursue FCA off-label cases when it comes to cancer drugs. That’s because oncologists, in their efforts to fight the disease, do sometimes prescribe drugs for unapproved uses; that in itself is not necessarily against the law. However, seeking Medicare reimbursement for off-label usage, as well as paying or receiving kickbacks, both of which were done in this case, are illegal.
The second aspect involves Thalomid, which you may have heard of under the name Thalidomide. In the early 1960s, Thalidomide caused ghastly birth defects in pregnant women who took the drug to prevent nausea and to aid in sleep. The drug was not approved in the U.S. at that time, but the tragedies in other countries did significantly impact how our regulatory process for drugs changed. Thalidomide more or less disappeared until 1998, when it was approved in the U.S. as a treatment for leprosy (with severe warnings to keep it away from pregnant women) and marketed by Celgene under the name Thalomid.
Their success led Celgene to hope that the drug might successfully treat other diseases, such as cancer and AIDS. Brown alleged in her case that the company “flooded the country” with pharmaceutical representatives who were pressured to pitch Thalomid to oncologists. The FDA sent two warning letters to Celgene—in 1998 and in 2000—warning them to stop pushing the drug as a cancer treatment. It’s been estimated that, in 2000, 90 percent of the drug’s sales were for the treatment of cancer, even though Thalomid was not approved by the FDA as a cancer drug.
Brown’s share of the settlement has not yet been announced, but it is expected that she’ll receive between 25 and 30 percent of the settlement amount.
The Whistleblower Lawyer.
If you think you have the facts needed to bring a whistleblower case, the experienced whistleblower attorneys at the Louthian Law Firm can review your case and help you file the appropriate disclosure statement. Under some circumstances, the government will intervene, or join in your lawsuit.
Your chances of succeeding are greater if your whistleblower claim is substantive, clear, and to the point. Because of this, meeting with a qualified whistleblower attorney can increase your chances of winning. The Louthian Law Firm can help you form your claim so that the government will be more inclined to intervene in your case; government intervention can sometimes increase the chances of recovering reward money. Even if the government decides not to intervene, it could still be a good idea to pursue your case without government involvement. Our strong support system can assist you through every step of the process.
For a free, confidential evaluation of your case, call the Louthian Law Firm today at 1-803-454-1200 or, if you prefer, you can fill out our online contact form.