Legal News

Alleged Off-Label Marketing at Cephalon Leads to Big Settlement

By Dan Slater

In a continued effort to crack down on off-label drug marketing, state and federal regulators have struck a $443.9 million settlement with drug-maker Cephalon. The company has also agreed to submit to five years of heightened regulatory scrutiny of its sales and marketing practices.

Cephalon, reports the WSJ, is pleading guilty to one misdemeanor violation of the U.S. Food, Drug and Cosmetic Act, had put $425 million into reserve last year to cover last November’s tentative settlement with the U.S. Attorney’s Office in Philadelphia and the Justice Department. The company, which is paying $12 million in interest that accrued since then, is also settling two state investigations, agreeing to pay $6.15 million to Connecticut and $700,000 to Massachusetts.

Here’s the criminal information and here’s the plea agreement. Here’s the settlement agreement.

Cephalon, of Frazer, Pa., will plead guilty to promoting three medications — pain killer Actiq, narcolepsy pill Provigil and the epilepsy treatment Gabitril — for uses not approved by the FDA. Among other tactics, Cephalon promoted the drug off-label — or for non-approved uses — to neurologists and touted small studies conducted by doctors with whom it had ties in an effort to get Actiq prescribed for migraine headaches.

A two-year investigation by the Connecticut attorney general concluded last year that the drug maker engaged in questionable practices to expand sales of Actiq, approved only to treat cancer pain, by setting unrealistically high sales quotas and pushing larger prescriptions at higher doses.

Cephalon was repped by Morgan Lewis’s Eric W. Sitarchuk; and by King & Spalding’s J. Sedwick Sollers III and Mark Jensen.

Full post as published by Law Blog - WSJ.com on September 30, 2008 (boomark / email).