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Attorney General Kilmartin Announces Settlement with Pharmaceutical Company for Marketing Schemes and Illegal Kickbacks

Attorney General Peter F. Kilmartin announced that Rhode Island has joined with other states and the federal government to settle allegations that Celgene Corporation (Celgene) engaged in a variety of marketing schemes to promote the use of its drugs Thalomid and Revlimid for off-label use and by paying kickbacks to providers in order to induce them to prescribe those drugs.

Celgene, a New Jersey-based company, will pay the states and the federal government $280 million dollars, of which $20,730,360 will go to the Medicaid programs to resolve civil allegations that the company unlawfully marketed Thalomid and Revlimid through its off-label promotion and payment of kickbacks to prescribers, and thereby caused false claims to be submitted to the government health care programs. Rhode Island's Medicaid program is set to receive just over $102,000 from the settlement.

"Celgene schemed, lied, and paid millions in kickbacks in order to make profits at the expense of states' Medicaid budgets," said Attorney General Kilmartin. "Time and time again, Big Pharma ignores state and federal regulations and statutes because it is determined that the rewards in the form of profits outweighs the cost of getting caught. That type of corporate malfeasance cannot and will not be tolerated when the cost of healthcare, particularly the costs of medications, continues to increase."

Specifically, this settlement resolves allegations that Celgene unlawfully marketed these drugs for a variety of off-label uses, including Thalomid for the treatment of multiple myeloma prior to its FDA approval for use in treating multiple myeloma; for the treatment of myelodysplastic syndromes ("MDS"); brain cancer; bladder cancer; cervical cancer; esophageal cancer; Kaposi's sarcoma; leukemia, (including but not limited to chronic lymphocytic leukemia ("CLL")); lymphoma; melanoma; ovarian cancer; prostate cancer; pancreatic cancer; renal cancer; thyroid cancer; lung cancer; colon and colorectal cancer; uterine cancer; and breast cancer.

This settlement also resolves allegations that Celgene unlawfully marketed Revlimid for the treatment of multiple myeloma; newly diagnosed multiple myeloma; maintenance therapy for multiple myeloma; for the treatment of multiple myeloma without dexamethasone; for the treatment of MDS which is not associated with a deletion 5q cytogenetic abnormality; leukemia, (including but not limited to CLL); lymphoma; myelofibrosis; brain cancer; and prostate cancer. These indications for Thalomid and Revlimid were not approved by the FDA for some or all of the time-periods during which Celgene promoted the drugs for such uses. Certain of these indications were not covered by the State's Medicaid Program (42 U.S.C. Chapter 7 Subchapter XIX) for some or all of the time-periods during which Celgene promoted the drugs for such uses.

This settlement also resolves allegations that Celgene made or caused to be made false and misleading statements about Thalomid and Revlimid including: (a) improperly influencing the content of published drug compendia entries, medical literature, clinical studies and National Comprehensive Cancer Network ("NCCN") guidelines for Thalomid and Revlimid to support uses of these drugs not supported by medical science, including by making payments to physicians who had influence over the content of published drug compendia entries, medical literature, clinical studies, and NCCN guideline entries for Thalomid and Revlimid; (b) concealing or downplaying adverse events associated with use of Thalomid and Revlimid; and (c) improperly changing or causing doctors to change ICD-9 diagnosis codes submitted as part of the RevAssistTM Risk Minimization Action Plan, a restricted distribution program for Revlimid which was required as a condition of the FDA approval of Revlimid, to cause the prescriptions to be reimbursed by the State's Medicaid Program..

Finally, this settlement resolves allegations that Celgene, in violation of the Anti-Kickback Statute, 42 U.S.C. 1320a-7b and relevant state laws: (a) paid physicians who prescribed Thalomid or Revlimid to conduct speaker programs; (b) provided monetary support to physicians who prescribed Thalomid or Revlimid to conduct clinical trials and to write, or be listed as authors on, publications or medical literature; (c) paid physicians who prescribed Thalomid or Revlimid to work as consultants and/or serve on advisory boards; and (d) induced purchases of Thalomid and Revlimid by defraying patients' co-payment obligations for those drugs through its contributions to Patient Access Network Foundation ("PANF") and the Leukemia and Lymphoma Society, which acted as conduits for Celgene and eliminated any price sensitivity to physicians prescribing and patients taking Thalomid and Revlimid.

The investigation resulted from a qui tam action originally filed in the United States District Court for the Central District of California under the federal False Claims Act and various state false claims statutes.

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