Bio Pharma Giant -- Celgene -- Settles Case Alleging Marketing Violations For $280 Million

LOS ANGELES, July 25, 2017 /PRNewswire-USNewswire/ -- On the eve of trial, Bio Pharma giant, Celgene Corporation, has agreed to pay $280 million to resolve allegations it sold and promoted its blockbuster drugs, Thalomid and Revlimid, in violation of federal and state laws.

The case, U.S. ex rel. Brown v. Celgene, CV 10-03165 (RK) (C.D. Cal.), was brought by a former Celgene sales representative, Beverly Brown, under the federal False Claims Act (FCA) and state analogues.  The federal civil settlement agreement encompasses allegations Celgene: (1) promoted Thalomid and Revlimid for off-label uses that were not approved by the FDA, were – in many cases – unsafe, and were not properly reimbursable by federal insurance programs; and (2) offered illegal kickbacks to a wide range of entities in an effort to influence health care providers to select its products for use, regardless of whether they were reimbursable by federal or state health care programs or were medically necessary.  The settlement also encompasses allegations that Celgene: (1) concealed or downplayed adverse events associated with use of Thalomid and Revlimid; and (2) improperly influenced the content of published drug compendia entries, medical literature, clinical studies and NCCN guidelines for Thalomid and Revlimid to support uses of these drugs not supported by medical science, including by making payments to physicians who had influence over the content of published drug compendia entries.

Ms. Brown brought her case in 2010 and it remained under seal – and under investigation by the government for 4 years – until 2014 when the government decided not to pursue the case.

Pursuing the case on her own, the $280 million resolution marks the second largest recovery in a non-intervened FCA case, largest recovery against a pharmaceutical company in a non-intervened case where core allegations were based on off-label promotion, and largest recovery involving a manufacturer of cancer drugs.

Originally passed by Congress and signed into law in 1864, modern day federal and state false claims acts allow whistleblowers – known as "relators" – to bring suit in the name of government against individuals or entities that caused the fraudulent or improper expenditure of government monies.

The litigation involved the review of millions of documents, briefing of numerous discovery motions and potentially case dispositive motions, taking of roughly 40 depositions, and analysis by leading medical experts, pharmaceutical economics experts, and conflicts of interest and medical ethics experts.  Celgene alone tendered 13 experts.  This undertaking makes this one of the most extensively litigated pharmaceutical cases brought under the FCA.

At the culmination of the discovery period, on December 28, 2016, the United States District Court in Los Angeles (Judge George King) issued an order denying summary in part, allowing the case to proceed to trial against Celgene on claims of off-label promotion.

In his Opinion, Judge King noted that "Celgene understood that its promotional efforts were successful in causing physicians to write prescriptions."  The Opinion also said that "hundreds of thousands of claims for off-label uses of Thalomid and Revlimid were submitted to Medicare and other government programs during the time when Celgene was promoting these drugs off-label."

"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 PLLC (GBB) and counsel to Beverly Brown.  His partner, Justin Brooks, added that discovery in the case identified new paradigms for pharmaceutical fraud that will influence investigation and litigation of future False Claims Act cases.

In addition to GBB, the Brown litigation team included the firms of Bienert, Miller & Katzman ("BMK") of San Clemente California, Richard A. Harpootlian, P.A. of Columbia, South Carolina, and former federal Judge and Harvard Law Professor, Nancy Gertner, from Boston, Massachusetts.  Their work was instrumental to the case's success.

GBB lawyers on the case include firm partners Reuben Guttman, Traci Buschner, and Justin Brooks as well as Of Counsel Dan Guttman, Liz Shofner, Caroline Poplin, MD/JD, and Paul Zwier, who is also an evidence expert and Professor at Emory Law School.

Richard Harpootlian and Chris Kenney were the principle counsel on the case from Richard A. Harpootlian, P.A. Tom Bienert, Mike Williams, Ariana Hawbecker, and Ali Matin were the principal lawyers from BMK.

For attorneys at Guttman, Buschner & Brooks PLLC, the settlement marks another positive result in a string of cases under the False Claims Act.  With the addition of this settlement, GBB attorneys have represented whistleblowers in cases recovering nearly $5.5 billion for the federal government and state governments. 

This action also marks another significant recovery for Richard A. Harpootlian, P.A., which holds the record for the largest bounty paid to a relator in a South Carolina whistleblower action and has recovered hundreds of millions of dollars for federal and state governments.

Bienert, Miller & Katzman, PLC  (BMK) is a trial firm that was uniquely qualified to work with the other firms in this case.  Consisting of former federal and state prosecutors, federal public defenders and large firm trained attorneys, its lawyers collectively have hundreds of jury and court trials.  The result in this case marks a string of multi-million dollar trials and settlements for its clients.  BMK continues to advocate for a number of significant whistleblower suits, combining nationally recognized expertise in a boutique legal setting, ensuring personalized attention to their cases.

SOURCE Guttman, Buschner & Brooks PLLC

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