Thalidomide in Treating Anemia in Patients With Myelodysplastic Syndrome

DISEASE CHARACTERISTICS: * Diagnosis of myelodysplastic syndromes (MDS) of at least 12 weeks duration * Refractory anemia (RA) * RA with ringed sideroblasts * RA with excess blasts * Chronic myelomonocytic * No therapy-related MDS * No myelosclerosis or myelofibrosis occupying more than 30% of marrow space (or assessed as grade 3+ or greater) * No transformation to acute myeloid leukemia * No more than 20% blasts in bone marrow * No more than 5% blasts in peripheral blood * Patients with an erythropoietin level 100 mU/mL or less must have failed epoetin alfa treatment (i.e., at least 30,000 units of epoetin alfa weekly for at least 6 weeks) * Transfusion-dependent (received at least 2 units of packed RBCs or whole blood within the past 8 weeks) OR * Transfusion-independent (no packed RBC or whole blood transfusions within the past 8 weeks with 2 hemoglobin levels (at least 7 days apart) less than 11 g/dL) * No iron deficiency (e.g., absent bone marrow iron store) * If marrow aspirate is not evaluable, transferrin saturation must be at least 20% and ferritin at least 50 ng/mL * No uncorrected B12 or folate deficiency * No other contributing causes of anemia (e.g., autoimmune or hereditary hemolytic disorders or gastrointestinal blood loss) PATIENT CHARACTERISTICS: Age: * 18 and over Performance status: * ECOG 0-2 OR * Zubrod 0-2 Life expectancy: * At least 6 months Hematopoietic: * See Disease Characteristics * Absolute neutrophil count at least 500/mm\^3 Hepatic: * Bilirubin no greater than 2.0 mg/dL * AST and ALT less than 2 times upper limit of normal (ULN) * Hepatitis B surface antigen negative * Hepatitis C negative Renal: * Creatinine no greater than 1.5 times ULN Cardiovascular: * No uncontrolled hypertension * No clinically significant, symptomatic, unstable cardiovascular disease unrelated to MDS Pulmonary: * No clinically significant, symptomatic, unstable pulmonary disease unrelated to MDS Neurologic: * No clinically significant, symptomatic, unstable neurologic disease unrelated to MDS * No history of epilepsy * No sustained neurologic deficit (e.g., stroke) * No grade 2 or greater peripheral neuropathy Other: * Not pregnant or nursing * Negative pregnancy test * Fertile patients must use at least 1 highly effective and 1 additional effective method of contraception for 4 weeks prior to, during, and for 4 weeks after study participation * HIV negative * No clinically significant, symptomatic, unstable endocrine, gastrointestinal, or genitourinary disease unrelated to MDS * No other malignancy within the past 5 years except basal cell or squamous cell skin cancer or carcinoma in situ of the cervix * No life-threatening or active infection requiring parenteral antibiotics * No other serious concurrent illness PRIOR CONCURRENT THERAPY: Biologic therapy: * See Disease Characteristics * More than 7 days since prior hematopoietic growth factors (e.g., epoetin alfa, filgrastim (G-CSF), sargramostim (GM-CSF), or interleukin-3) * No prior thalidomide * No prior agents intended to inhibit vascular endothelial growth factor or tumor necrosis factor alfa (e.g., etanercept or infliximab) * No concurrent epoetin alfa Chemotherapy: * No concurrent chemotherapy that may be active against MDS Endocrine therapy: * More than 30 days since prior androgens * No requirement for ongoing therapy with systemic corticosteroids Radiotherapy: * Not specified Surgery: * Not specified Other: * More than 30 days since prior treatment for MDS except RBC transfusion or epoetin alfa * More than 30 days since prior participation in another experimental clinical trial * More than 30 days since prior experimental drugs * No other concurrent investigational agents or treatments