Cephalon settles charges for $425 million

September 30, 2008|By Linda Loyd, Inquirer Staff Writer

In what prosecutors called the largest health-care settlement in federal court here, Cephalon Inc. will pay $425 million to settle criminal and civil charges that it illegally marketed three of its drugs.

The Frazer company is expected to plead guilty in U.S. District Court to one misdemeanor criminal charge, the U.S. Attorney's Office in Philadelphia announced yesterday.

Cephalon, a biopharmaceutical company based in Chester County, previously announced last November an "agreement in principle" with the U.S. attorney and Justice Department over an investigation that began in 2003 of its "off-label" promotion and sales of pain medication Actiq, Provigil for sleep disorders, and Gabitril for epilepsy.

Cephalon said yesterday that it had reached separate agreements with attorneys general in Connecticut and Massachusetts to settle related probes.

The drug manufacturer will pay $6.15 million to Connecticut and $700,000 to Massachusetts.

Law enforcement authorities began seeing misuse of Actiq by people who also abused OxyContin and other narcotic painkillers in 2004. Actiq had the street name "perc-o-pops."

Actiq, a berry-flavored cancer-pain treatment on a stick, is approved to treat bouts of severe cancer pain in patients who can tolerate opiods such as morphine. But Cephalon promoted it to treat migraines and backaches, prosecutors said.

"I can't tell you a specific person who died, or was harmed, by the off-label marketing," acting U.S. Attorney Laurie Magid said at a news briefing. "We know in the case of these drugs, patients were harmed, including death, when there was off-label use."

Cephalon's best-selling drug, Provigil, is approved to treat excessive drowsiness associated with narcolepsy, obstructive sleep apnea, and shift-work sleep disorder.

Analysts have estimated that 80 percent of Provigil prescriptions are for "off-label" treatment of sleepiness and fatigue from illnesses such as depression, Parkinson's disease and multiple sclerosis.

Gabitril, Cephalon's drug to treat epileptic seizures, was promoted to treat disorders including anxiety, insomnia and pain, the government said.

Cephalon's off-label campaigns were successful. Actiq sales jumped from $50.1 million in 2001 to $550.4 million in 2006.

Gabitril revenue rose from $24.6 million in 2001 to $87.3 million in 2004, and Provigil sales from $146.2 million in 2001 to $691.7 million in 2006, the government said.

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