Celgene Rescinds Agreement to Compensate Cancer Patients Days Before Christmas

WASHINGTON, Jan. 08, 2020 (GLOBE NEWSWIRE) -- On December 23, 2019, Celgene backed out of a settlement in which it had agreed to pay $55 million to end payors (consumers, insurers, union health and welfare funds, municipalities, and others) that had accused Celgene of illegally blocking generic versions of life-saving cancer drugs from coming to market. (In re Thalomid and Revlimid Antitrust Litigation, 14-cv-6997, United States District Court for the District of New Jersey.)

Co-Lead Counsel are from Hausfeld (Melinda Coolidge, Walter Kelley, Brent Landau, Katie Beran, and Tamara Freilich), Block & Leviton LLP (Whitney Street and Stephen Teti), and Hach Rose Schirripa & Cheverie LLP (Frank Schirripa and Daniel Rehns).

Celgene had agreed to settle the long-running class action litigation back in July. Bristol Myers Squibb (NYSE:BMY) completed its acquisition of Celgene in November 2019 (NYSE:BMYRT).

The provisions of the settlement allowed Celgene to rescind the agreement if certain class members decided not to participate in the class settlement and instead pursue their own claims.

More than 8,000 individuals and more than 800 third party payors (e.g., insurers, companies that self-insure) filed claims to participate in the settlement. Another 80 entities filed an opt out form seeking to be excluded from the settlement and preserve their right to bring a separate lawsuit against Celgene. Citing the exclusion of these class members, Celgene withdrew from the settlement agreement.

“It is very disappointing that Celgene has elected to back out of a deal that would have provided restitution to as many as 8,000 individual patients who filed claims to share in the settlement,” said  class representative David Mitchell, a cancer patient who took Revlimid for more than five years. “It is my hope that this action by Celgene leads to a much larger total payout by Celgene after all is said and done.”

Hausfeld partner Melinda Coolidge added: “These kinds of rescission provisions are common in class settlements, but I have never heard of a defendant ever actually rescinding an agreement. The settlement had received widespread support from the class, based on the claims rate and the fact that no class members objected to the settlement.”

According to the plaintiffs’ experts, Celgene’s actions caused patients and entities in California, the District of Columbia, Florida, Kansas, Maine, Massachusetts, Michigan, Nebraska, New York, North Carolina, Oregon, Pennsylvania, Rhode Island, and Tennessee to pay $3 billion more than they would have if a generic version had been available. Revlimid, for example, costs more than $15,000 a month for treatment.

By backing out of the class settlement, Celgene returns to litigation against the putative class, including the 9,000 class members that would have released their claims in exchange for a part of the $55 million settlement, facing total exposure of greater than $3 billion.  

Hach Rose partner Frank Schirripa stated: “All settlements are a compromise, but I am astounded that after limiting its exposure by paying $55 million into an escrow account in 2019, Celgene chose to return to a world in which it faces exposure of more than $3 billion. It seems fiscally irresponsible to me.”

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Deborah Schwartz 
Media Relations 
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