Celgene backs out of $55M drug monopoly settlement

Celgene has backed out of a $55 million settlement it reached last year in a move legal experts are calling highly unusual, according to STAT

The class-action lawsuit accused Celgene — which was acquired by Bristol-Myers Squibb for $74 billion last year — of exploiting an FDA safety program as a way to block generic rivals from developing cheaper versions of Revlimid and Thalidomid, drugs used to treat multiple myeloma, a cancer that forms in the blood.

The FDA program, called a Risk Evaluation and Mitigation Strategy, requires drugmakers to develop a plan to educate physicians about a drug it develops and to monitor distribution of that drug, according to STAT. Brand name drugmakers have at times claimed the program does not allow the sharing of drug samples to generic companies, which generic drugmakers would then use to develop cheaper versions of the drug. 

Lawmakers have introduced bills that would allow generic drugmakers to acquire the needed samples by contacting HHS, STAT reported. 

The Celgene lawsuit alleges that the drugmaker stopped patients from being able to access cheaper versions of the cancer drugs. It also claims Celgene fraudulently obtained patents on procedures to ensure its drugs were used safely, filed "sham" patent infringement lawsuits against several drugmakers' litigation, and filed citizen’s petitions asking the FDA to deny approvals for any generics, according to STAT

Celgene agreed to settle the lawsuit for $55 million in July, which would have been paid to the nearly 9,000 class members serving as plaintiffs. Class-action settlements often allow some parties to opt out of the deal, but it is unusual for a defendant to back out, STAT reported.

Lawyers for the plaintiffs were reportedly shocked by the news that Celgene is backing out.

"Maybe there’s an instance of fraud, but I’ve never heard of it happening in an ordinary case," Carl Tobias, a professor at the University of Richmond law school who tracks the pharmaceutical industry and product liability litigation, told STAT

A Bristol-Myers spokesperson told STAT that Celgene "exercised its right to terminate the settlement in light of the fact that numerous large third party-payers who were members of the settlement class refused to release their potential claims and participate in the settlement."

Celgene is now back to square one in defending itself against the class-action suit.

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