Celgene Corporation, a biotech company based in New Jersey, will pay out $280 million to settle claims that it cited uses not approved by the U.S. Food and Drug Administration (FDA) in promotion of its cancer treatment drugs Thalomid and Fevlimid.
According to Judge George H. King, the plaintiff “provided sufficient evidence” that the corporation was promoting the drug for uses the FDA had not approved. As a result, the government had to pay hundreds of thousands of dollars for “off label” prescriptions.
Both the drugs are approved for use in treating myeloma, but Celgene also pitched drugs to physicians making claims about off-label uses. The company also allegedly paid kickbacks to doctors and hospitals to ensure the drugs would be widely prescribed to patients.
Because of this off-label marketing, Celgene allegedly submitted false Medicare claims in 28 states and the District of Columbia. Federal programs only cover prescriptions for DFA-approved uses, which meant Medicare billings for these non-approved uses are technically fraudulent. By accepting the settlement, however, Celgene does not admit any guilt. It will instead pay $259.3 million to the federal government, $4.7 million to California and a total of $16 million spread throughout the rest of the states affected by its alleged wrongdoing.
Whistleblowers crucial in false claims cases
In many cases, the federal government would never become aware of false claims and other similar types of fraud if not for the reports of whistleblowers who became aware of the wrongdoing in their company or agency. This is one of the reasons why whistleblower actions are subject to such strong protections from the federal government: because their actions are crucial to eliminating waste and fraud.
If you would like to explore your options for filing a complaint regarding false claims or fraud, contact a knowledgeable Dallas attorney at Whistleblower Law for Managers.