Celgene Faces Off-Label Promotion Lawsuit Over Successful Cancer Drugs Thalomid and Revlimid

Since 2006, Celgene Corporation has earned $20.9 billion from the sales of two of its drugs—Thalomid and Revlimid. The drugs are used for patients suffering from multiple myeloma. This year, Celgene has posting amazing sales of Revlimid in particular—doctors are prescribing the drug as an effective cancer treatment with limited side effects. However, 2014 has also given rise to both an off-label suit stemming from before FDA recognized the drugs and antitrust allegations.

In February 2014, Celgene was accused of promoting its cancer drug Thalomid and related compound Revlimid for unapproved purposes. The accusations come from an unsealed whistleblower lawsuit filed by a former sales rep back in 2007. Celgene has denied any wrongdoing and asked a federal judge in Los Angeles to dismiss the case before the trial because it failed to state a plausible claim. In a July 10 ruling, U.S. District Judge George King denied the company’s motion, stating that the allegations, if supported by evidence at trial, did in fact properly assert violations of the Federal False Claims Act.

The whistleblower complaint alleged that “[b]y marketing drugs to cancer patients and their doctors for unapproved purposes and paying kickbacks to physicians, Celgene compromised physicians’ professional judgment so that they would make decisions not based solely on scientific evidence.” The complaint further stated that “Celgene racked up hundreds of millions of dollars a year in sales for purposes not approved by the FDA by pushing drugs to treat cancers even though there were well-known, evidence-based treatments that worked as well or better than Thalomid and its cousin, Revlimid.”

In his response to Celgene’s motion to dismiss, Judge King sided mostly with the plaintiff, shooting down almost every point Celgene made along the way.

For example, Celgene stated that off-label promotion could not serve as a predicate for a false claim because the relator “failed to plausibly allege that it promoted non-reimbursable uses.” The judge disagreed, noting that the relator alleged “28 off-label, non-FDA-approved uses,” which were not covered by federal healthcare programs because they were not ‘medically accepted’ within the meaning of the Medicaid and Medicare statutes.” Celgene noted that this “blanket assertion,” was not sufficiently specific. The judge disagreed again, stating that whether a drug is medically accepted “is a complex, case-by-case inquiry not susceptible to resolution on a motion to dismiss, and expert testimony is often necessary.”

Second, Celgene raised the issue of whether a companies’ promotion can possibly “cause” a false claim when doctors are the ones actually getting reimbursed. The judge stated: “The causal chain is straightforward: (1) Celgene allegedly fraudulently promoted Thalomid and Revlimid for non-reimbursable, off-label uses to physicians, (2) this off-label marketing caused physicians to write off-label prescriptions, and (3) many of these non-reimbursable prescriptions were submitted to government payors for reimbursment.”

Third, where Celgene argued that the whistleblower allegations lacked necessary “particularity,” the judge argued back: “Celgene cannot reasonably suggest that the 100-plus pages in the TAC do not give adequate notice of the misconduct alleged—as a direct participant in Celgene’s off-label promotion, [the relator] ‘sets out the particular workings of a scheme that was communicated directly to [her] by those perpetrating the fraud.'”

Finally, the judge took issue with Celgene’s argument that physicians use independent judgment to prescribe off-label and aren’t persuaded by sales reps. Celgene even referenced anecdotes in the plaintiff’s complaint where some physicians “rebuffed” Celgene’s advances. The judge, again, countered: “Because of these anecdotes, Celgene suggests that ‘the only inference that can be drawn…is that physicians did not prescribe Thalomid or Revlimid for off-label uses because of Celgene’s alleged promotion.'” However, “[t]his is a fatuous argument,” the judge states. The relator “explicitly alleges that in her experience these doctors who were not convinced by Celgene’s fraudulent practices ‘were the exception.'”

Analysis

Surviving a motion to dismiss is certainly not the end of the road, and the outcome of this case will be interesting to follow for a number of reasons. First, Revlimid is currently extremely successful and widely used in the treatment of multiple myeloma. Celgene just reported very substantial earnings in 2014 behind the cancer drug’s sales.

Thus, this case begs the question that if Revlimid is successfully treating so many cancer patients now, should Celgene be punished for their potentially truthful off-label discussions in the few years before FDA-approval caught up with the treatment’s benefits? In the year since the Caronia decision, First Amendment considerations have been creeping more and more into the discussion over banning truthful off-label speech.

Notably, however, this current case also involves allegations of kickbacks to doctors. The judge notes in his Celgene opinion: “all claims that result from unlawful kickback are false for purposes of the FCA” (False Claims Act).

The case will also be interesting from a compliance standpoint going forward. The court states: that the relator “was employed by Celgene from 2001 to 2011 as a pharmaceutical sales representative (though she was given technical titles like Immunology Specialist and Hematology Oncology Consultant), and she receive bonuses based on the amount of Thalomid and Revlimid sold in her district.”

This language anticipates a situation where sales reps are basically disguised as medical professionals to be able to talk off-label. Granted, this complaint is alleging action from the late 1990s and early 2000s before stringent CIA-influenced firewalls were in place. Furthermore, while medical affairs departments are commonplace now in pharmaceutical companies, even ten years ago this was not the case. However, this case may perhaps signal a trend where courts really analyze the particular roles that employees carry out within a company.