Celgene backs out of $55M class action settlement on claims it blocked copycats to Revlimid, Thalomid

In an unusual move, Celgene has backed out of a $55 million settlement with patients and payers over allegations it illegally blocked competition to multiple myeloma meds Thalomid and Revlimid. With the decision, the company will go back to fighting claims from thousands of patients and payers, who allege billions in damages.

Celgene, now part of Bristol-Myers Squibb under last year’s massive merger, originally agreed to the deal in July and backed out on December 23, plaintiffs' lawyers say. Patient advocate David Mitchell, plus several union pension funds, brought the class action lawsuit.

When the sides agreed to their $55 million deal, the agreement included stipulations that Celgene could back out if certain plaintiffs didn’t opt in. In all, more than 8,000 patients and 800 payers opted in to the original settlement. But 80 plaintiffs opted out in order to bring their own lawsuits, and Celgene rescinded the agreement based on those opt-outs, plaintiffs' lawyers say.

Now, the drugmaker will have to defend against claims in a class that includes about 9,000 plaintiffs.

The case centers on allegations that Celgene refused to sell samples of Thalomid and Revlimid to deter copycat development and inked supply agreements to restrict the distribution of Thalomid’s active ingredient. Further, the company allegedly filed sham patent challenges as another way to block competition.

Plaintiffs say they could’ve saved more than $3 billion if a generic had been approved earlier, but Celgene’s actions blocked that possibility.

Celgene's move is unusual, experts say. The “rescission provisions are common in class settlements, but I have never heard of a defendant ever actually rescinding an agreement," Melinda Coolidge, an attorney for the plaintiffs, said in a statement.

RELATED: Wiping its slate ahead of BMS buy, Celgene to pay $117M in Revlimid antitrust settlements 

A BMS spokesperson said Celgene "exercised its right to terminate the settlement in light of the fact that numerous large third party payors who were members of the settlement class refused to release their potential claims and participate in the settlement."

One week after last year's $55 million settlement, Celgene inked a $62 million settlement with Mylan over similar allegations.  

The drugmaker has dealt with years of criticism over price hikes and allegations of anticompetitive conduct for Revlimid. The drug is among the world's best-selling medicines and was a key part of Bristol-Myers' $74 billion buyout offer.