(Reuters) - The U.S. Justice Department said on Tuesday that Celgene Corp (O:CELG) had agreed to pay $280 million to settle a lawsuit that accused the company of promoting its cancer drugs Revlimid and Thalomid for off-label uses.
In a statement, Celgene said it has agreed to resolve a "whistleblower" lawsuit that alleged it had violated the federal False Claims Act by submitting false claims to Medicare.
The company has denied any wrongdoing in this matter, but said it was settling to avoid the "uncertainty, distraction, and expense of protracted litigation".
The lawsuit alleged that Celgene violated the laws of 28 states and the District of Columbia by submitting fraudulent claims to state healthcare programs, including California's Medi-Cal program.
The DoJ said Celgene was expected to pay the settlement on Wednesday.
On March 1, Reuters reported that Celgene and the whistleblower, Beverly Brown, had asked the judge presiding over the case not to issue any substantive rulings for 30 days while they pursue mediation.
Brown, a former sales representative for the company, sued New Jersey-based Celgene in 2010, bringing claims on behalf of the federal government and about two dozen states, including California, Illinois, Texas and New Jersey. The case was unsealed in 2014.
Brown claimed that Celgene engaged in the off-label marketing of its drugs, which caused off-label prescriptions that were ineligible for reimbursement to be submitted to Medicare and state Medicaid programs, violating the federal False Claims Act.
Thalomid was approved by the U.S. Food and Drug Administration in 1998 to treat a rare skin disease related to leprosy. The drug's active chemical, thalidomide, was known for causing birth defects when it was used to treat morning sickness in the 1950s and 1960s.
Celegene's flagship drug Revlimid, approved in 2005, is a chemical derivative of thalidomide. Both drugs are now approved for use in some cancer patients.
Brown said in her lawsuit that Celgene promoted the drugs as cancer treatments for which they were not approved. The promotional efforts included kickbacks paid to doctors to speak about the drugs, her complaint said.