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CELL THERAPEUTICS, INC. TO PAY UNITED STATES $10.5 MILLION TO RESOLVE CLAIMS FOR ILLEGAL MARKETING OF CANCER DRUG
Company Promoted Arsenic Drug for Cancer Treatment when Drug Had Not Been Proven to be Safe or Effective

FOR IMMEDIATE RELEASE
April 17, 2007

WASHINGTON – Cell Therapeutics Inc. (CTI) of Seattle, Washington, has agreed to pay the United States $10.5 million to resolve allegations of the company’s illegal marketing of the anti-cancer prescription drug Trisenox, the Justice Department announced today. According to the government’s complaint, CTI promoted the drug for various uses that were unapproved by the Food & Drug Administration (FDA).

The alleged “off-label” uses caused doctors to prescribe Trisenox to treat various forms of cancer for which the drug was neither approved by the FDA nor proven to be either safe or effective. The government’s suit alleged that because of the company’s actions, physicians who prescribed Trisenox “off-label” unwittingly submitted false claims for reimbursement to the Medicare program from 2001 until 2005. In 2005, CTI sold Trisenox to another company and the drug’s new owner halted CTI’s misleading off-label promotion campaign.

“Cell Therapeutics essentially subverted a regulatory system designed to assure that patients receive only those drugs that have been proven to be effective for their illness,” said Peter D. Keisler, Assistant Attorney General for the Justice Department’s Civil Division.

Under the rules in effect at the time of the conduct in question, the complaint asserts that Medicare paid only for anti-cancer drugs when prescribed for FDA-approved uses or uses that were determined to be medically accepted as published in certain specific pharmacological texts known collectively as the “compendia.” The government alleges that CTI knew that Trisenox was FDA-approved for only one type of cancer and was not listed as a medically accepted treatment in the compendia for any other condition. Nevertheless, the complaint states that CTI falsely marketed the drug to doctors by suggesting that Trisenox was FDA-approved and listed as medically accepted in the compendia for other types of cancers.

“Cell Therapeutics enriched itself at taxpayer expense by aggressively marketing this drug to doctors for use in treating certain types of cancers even though the company knew that the drug had no proven medical benefit in the treatment of those cancers and had not been approved by the FDA for those uses,” said Jeffrey C. Sullivan, U.S. Attorney for the Western District of Washington.

“Our office has been aggressively pursuing off-label marketing cases, particularly where drug companies exploit the Medicare program, and take advantage of Medicare beneficiaries,” said Sarah Allen, Special Agent in Charge for the Health and Human Services Office of Inspector General (HHS-OIG).

In addition, the government’s complaint alleges CTI used illegal kickbacks to induce physicians to prescribe Trisenox. Under sham “consulting agreements” physicians were paid $500-$1,000 to attend dinners or conferences on the off-label uses of Trisenox. These meetings were held at expensive resorts and restaurants. Doctors who wrote large numbers of prescriptions for Trisenox for off-label uses were asked to speak at various events for additional financial bonuses.

The case was investigated by the Department of Health and Human Services Office of Inspector General (HHS-OIG), the Food and Drug Administration (FDA) and the FBI. Assistant United States Attorney Peter Winn headed the case for the Western District of Washington. A copy of the civil complaint is available on PACER, or can be provided by Emily Langlie, Public Affairs Officer for the United States Attorney’s Office. Contact Information: Emily.Langlie@usdoj.gov or (206) 553-4110.

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