Pharmaceutical Company Cephalon to Pay $425 Million for Off-Label Drug Marketing

PIERRE, S.D.- Attorney General Larry Long announced today that the National Association of Medicaid Fraud Control Units joined the federal government to reach an agreement in principle with pharmaceutical manufacturer, Cephalon, Inc. to settle allegations of improper off-label marketing of three pharmaceutical drugs. As a result, Cephalon will pay the states and the federal government $375 million in damages and penalties for Medicaid and other federal health care programs. Cephalon will pay an additional $50 million to resolve alleged violations of the Food, Drug, and Cosmetic Act. The State of South Dakota will recover $49,198.00 for its share in the settlement.

The national federal and state settlement totaling $425 million dollars resolves allegations that Cephalon promoted the drugs Provigil, Gabitril, and Actiq for uses other than what the Food and Drug Administration approved.  Cephalon also funded continuing medical education programs, through millions of dollars in grants, to promote off-label uses for these drugs. 

• Provigil: Although FDA-approved to treat only narcolepsy and sleep disorders, Cephalon marketed Provigil as a non-stimulant drug to treat sleepiness, tiredness, decreased activity, lack of energy and fatigue.
• Gabitril: Although FDA-approved as a partial treatment for seizures, Cephalon marketed Gabitril as a remedy for anxiety, insomnia, and pain.  Following reports of seizures in patients taking Gabitril that did not have epilepsy, the FDA required Cephalon to send a warning to physicians advising them of the risks of seizures in connection with off-label Gabitril use.
• Actiq: Although FDA-approved to treat opioid-tolerant cancer patients (or those patients for whom morphine-based painkillers are no longer effective), Cephalon marketed Actiq for conditions including migraines, sickle-cell pain crises, injuries, and in anticipation of changing wound dressing or radiation therapy.

This settlement reimburses the federal government and the participating states for excessive amounts paid by the Medicaid program as a result of Cephalon’s improper off-label marketing campaign. Additionally, Cephalon entered into a Corporate Integrity Agreement (CIA) with the Department of Health and Human Services, Office of the Inspector General, requiring strict scrutiny of its future marketing and sales practices. 

The South Dakota Medicaid Fraud Control Unit and the South Dakota Department of Social Services assisted in recovering the settlement money.

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