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Record $280 Million Settlement in False Claims Act Case

Sat 25th Aug 2018, Blogs

Through a negotiated settlement and a court order, whistleblower Beverly Brown has received a total relator share award of more than $78 million for her efforts in obtaining a $280 million False Claims Act settlement against Celgene Corporation.  The $280 million settlement was the second largest recovery ever recorded in a non-intervened case brought under the federal False Claims Act and the relator share award to Brown is also among the largest in history.

The False Claims Act allows whistleblowers – known as “relators” – to bring suit in the name of the government against individuals or entities that caused the fraudulent or improper expenditure of government funds. If the case is successful, the relators receive a portion of the government’s recovery, known as a “relator share.”

Brown, a former Celgene sales representative, filed suit against Celgene under the False Claims Act on behalf of the United States government and 29 states and municipalities in 2010.  Brown alleged that Celgene illegally promoted two of its drugs – Thalomid and Revlimid – for uses that were not approved by the FDA and paid illegal kickbacks to healthcare providers and others in an effort to increase the sales of its drugs.

After Brown filed suit, the case remained under seal for four years while the government investigated.  In 2014, the government declined to intervene, leaving Brown to either dismiss the case or pursue it on her own.  Brown elected to pursue the case on her own.

The case was thereafter one of the most extensively litigated pharmaceutical cases ever brought under the False Claims Act.  It involved the review of millions of documents, numerous discovery motions and potentially case-dispositive motions, approximately 40 fact and expert depositions, and dozens of pretrial motions.  The parties collectively designated 17 expert witnesses, consisting of some of the nation’s leading experts in the fields of pharmaceutical economics, drug safety and medical ethics. 

In early 2017, Brown negotiated the $280 million settlement with Celgene after the trial court denied Celgene’s motion for summary judgment as to Brown’s off-label promotion claims and set the case for trial.  Celgene paid most of the settlement amount ($259,269,640) to the federal government, and paid the balance to the state and municipal plaintiffs.

Under the False Claims Act, Brown was entitled to between 25 percent and 30 percent of the settlement amount. After the federal government offered Brown only the statutory minimum 25 percent, she filed a motion with the court asking the judge to determine the relator share percentage.  The court ruled that the extensive efforts by Brown and her counsel to bring the case to a successful resolution warranted a 28 percent relator share, resulting in a relator share payment $72,595,499.20. A copy of the court’s opinion is found here.  Brown previously received a negotiated $5,475,551.15 relator share award on the portion of the settlement paid to the state and municipal plaintiffs, making her total relator share award for the Celgene lawsuit $78,071,050.40. 

Thomas H. Bienert, Jr., Michael R. Williams, Ariana Seldman Hawbecker, and Ali Matin of Bienert, Miller & Katzman, PLC, represented Brown in the case, in addition to Washington, D.C.-based Guttman, Buschner & Brooks and Richard A. Harpootlian, P.A. of Columbia, South Carolina.