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Whistleblower Wins Key Ruling Against Celgene in Lawsuit Over Off-Label Drug Promotion

Whistleblowers and those who support and represent them will be pleased and energized by a December 28, 2016, ruling by U.S. District Judge George H. King of the Central District of California in a case involving the unapproved, or off-label, marketing of prescription drugs.

Doctors are generally allowed to prescribe prescription drugs for uses that haven’t been approved by the Food and Drug Administration, but pharma companies are barred under federal law from marketing drugs to doctors for these unapproved uses.

In this case, Celgene, a major biotech company, was targeted by a former employee, Beverly Brown, who blew the whistle on the company’s marketing practices. Brown alleged that Celgene promoted two of its prescription drugs, Thalomid and Revlimid, for use in cancer patients, an application that the FDA had not approved.

Brown was hired by Celgene in April 2001, essentially in a sales and marketing capacity. In late 2007, she became concerned when her manager instructed her to call doctors to ask them to change the billing codes associated with prescriptions of Celgene’s drugs. Brown complained to management about the practice, which she believed was illegal. She later contacted the FDA, and in 2010, she filed a qui tam case against Celgene on behalf of the federal government, 24 states, the District of Columbia, and the City of Chicago.

In her complaint, she alleged that Celgene illegally promoted Thalomid and Revlimid to doctors for unapproved uses. She invoked the federal False Claims Act and similar state laws.

The theory behind her case, as is typical in whistleblower cases, was that the federal government and state governments spent money on these drugs for their unapproved uses under the Medicare and Medicaid programs and other health-care programs. Since these uses were unapproved, each claim for reimbursement by Celgene under a health-care program constituted a false claim under these laws, Brown asserted.

Celgene sought summary judgment, but Judge King rejected that motion and found that a reasonable jury could conclude in Brown’s favor – so that case can and will proceed.

The judge 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.”

Looking carefully and precisely at the very complex Medicare statute, Judge King squarely concluded that “Medicare claims that seek reimbursement for non-medically accepted uses are false as a matter of law.” 

Revlimid’s total sales in 2015 were $5.8 billion, and the case against Celgene is estimated to have involved hundreds of thousands of prescriptions, so the stakes are very high in this case. What’s more, Judge King has delivered an unequivocal statement that the False Claims Act has a major role to play in challenging off-label uses of prescription drugs.

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