Bloomberg Law
July 25, 2017, 8:03 PM

Celgene Settles Whistle-Blower Fraud Suit for $280 Million

Bloomberg Media

By Jef Feeley and Doni Bloomfield, Bloomberg News

Celgene Corp. agreed to pay $280 million to resolve a whistle-blower’s claims the drugmaker used illegal marketing tactics to turn its Thalomid and Revlimid cancer drugs into blockbuster sellers, the U.S. said.

The settlement ends claims by a former company saleswoman that Celgene defrauded federal and state Medicare programs out of billions by luring doctors into prescribing the cancer drugs for unapproved uses, Acting U.S. Attorney Sandra Brown in Los Angeles said in a statement.

Brian Gill, a Celgene spokesman, didn’t immediately respond to a call seeking comment. The settlement is equivalent to about two weeks worth of sales of Revlimid, which generated $6.97 billion in revenue for Celgene last year, according to data compiled by Bloomberg.

Celgene fell less than 1 percent to $136.53 at 3:37 p.m. in New York.

The saleswoman, Beverly Brown, alleged that Celgene paid doctors and hired ghostwriters to tout uses for Thalomid beyond the product’s approval, including treating blood cancer, years before it was authorized by regulators. Brown said the company used similar tactics to promote Thalomid’s successor, Revlimid.

Thalomid, Revlimid, and Celgene’s latest successor drug, Pomalyst, accounted for $8.4 billion, or about 75 percent, of Celgene’s 2016 revenue and made the company one of the fastest- growing U.S. biotech firms.

Celgene has vowed to nearly double total sales to more than $21 billion by 2020. The stock has soared 350 percent, more than fourfold, in the past five years, outperforming the Nasdaq Biotechnology Index.

As part of the settlement, Beverly Brown may be entitled to as much as $84 million, or 30 percent of the recovery, under federal false-claims laws. She worked as a Celgene saleswoman for a decade, according to court filings.

The case is U.S. ex rel. Brown v. Celgene Corp., case number, 10-cv-3165, U.S. District Court for the Central District of California (Los Angeles).

For more news, visit Bloomberg .