Celgene Corp., a New Jersey pharmaceutical manufacturer, has agreed to pay $280 million to settle a False Claims Act lawsuit related to allegations that it promoted cancer drugs for uses that had not been approved by the Food and Drug Administration (“FDA”). Under the terms of the agreement, which does not include any admission of wrongdoing by the defendant, Celgene will pay $259.3 million to the United States and $20.7 million to 28 states and the District of Columbia.

The allegations against Celgene center around its distribution and marketing of two closely related drugs, Thalomid and Revlimid. On introduction to the U.S. market, both drugs were approved for a narrow range of uses to treat specific diseases: Thalomid for patients with complications from leprosy and Reylimid for patients with a rare form of cancer. However, despite repeated warnings from the FDA, Celgene allegedly aggressively marketed both drugs to doctors as treatments for a far wider range of cancers. Thalomid was only approved to treat any form of cancer in 2006, but in 2000 a Wall Street analyst estimated that over 90% of Thalomid’s sales were for cancer treatment and in 2005 it was Celgene’s leading product,

Once Revlimid came to market 2005, Celgene allegedly marketed it in a similar way as it had Thalomid, promoting it as a treatment for many different types of cancers when it had in fact only been approved to treat one. Celgene even allegedly went so far to pressure doctors to use the more expensive Revlimid as a Thalomid replacement.

Acting United States Attorney Sandra R. Brown highlighted the severity of Celgene’s alleged misconduct: “Patients deserve to know their doctors are prescribing drugs that are likely to provide effective treatment, rather than drugs marketed aggressively by pharmaceutical companies.”

The allegations against Celgene were brought to court by healthcare whistleblower Beverly Brown, who had been employed as a sales manager by Celgene. Ms. Brown lodged her complaint pursuant to the False Claims Act, a law that allows private citizens to sue companies engaged in fraudulent misconduct on behalf of the United States. Once a False Claims Act lawsuit is filed, federal prosecutors can intervene in the case on behalf of the federal government. However, even in cases where the government decides not to intervene, such as this one, qui tam whistleblowers like Ms. Brown can succeed in gaining large compensations for the government and significant rewards for themselves by aggressively litigating against companies conducting business in fraudulent and improper ways.