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Drug fraud settlement nets Washington state $368,000

This April 7, 1998 file photo shows capsules of the drug thalidomide at the Celgene Corp. in Warren, N.J, printed with a symbol warning pregnant or soon-to-be pregnant women against use of the drug that had caused thousands of infant deformities. Celgene has agreed to pay $280 million to settle a federal lawsuit alleging it committed fraud by promoting a drug for leprosy and another therapy for unapproved cancer treatments, federal prosecutors announced Tuesday, July 25, 2017. (Mike Derer / Associated Press)
Associated Press

OLYMPIA – Washington state will keep a small fraction of a $280 million national settlement involving a pharmaceutical company accused of committing fraud by promoting two drugs for unapproved cancer treatments, officials said Wednesday.

Celgene Corp. denied wrongdoing but agreed to pay the federal government, 28 states and the District of Columbia to settle a whistleblower claim brought by a former company saleswoman.

Washington state will keep about $368,000 for its Medicaid program under the settlement announced Tuesday, said Attorney General Bob Ferguson. The whistleblower could be entitled to as much as $84 million.

“I will not tolerate schemes that put profits before patients,” Ferguson said in a statement. “My office is committed to cracking down on those who endanger patients for the sake of their bottom line.”

From 2000 to 2015, Celgene marketed and sold medications Revlimid and Thalomid for conditions the FDA had not approved, and the company promoted the drugs by making false or misleading statements in medical literature and clinical studies, Ferguson said. The drugs were prescribed to 224 residents of the state during those years.

Thalomid is another name for thalidomide, a drug that caused severe birth defects when it was prescribed for morning sickness in the 1950s and 1960s. The FDA approved its use for treating leprosy in 1998.

Because Thalomid would only be useful to a fraction of the few hundred leprosy cases diagnosed in the U.S. each year, the company developed a plan to promote the drug for cancer – an effort that succeeding in turning Celgene into a multibillion-dollar company, the lawsuit said.

The lawsuit also said Celgene paid physicians kickbacks for prescribing the medications. A federal judge in Los Angeles dismissed that claim but allowed the case to proceed.

Washington state was awarded close to $743,000 under the settlement, but is refunding about half of that to the federal government because Medicaid is jointly funded by the states and the federal government.