Cephalon fined $437M for pushing 'off-label' use

Drugmaker Cephalon has agreed to plead guilty in federal court to distributing misbranded drugs and to pay $437 million in fines, forfeitures, interest and civil claims.

Cephalon, headquartered in Frazer, Chester County, develops and markets drugs to treat cancer-related pain, sleep disorders and epilepsy, among other medical problems.

From 2001 into 2006, the company marketed the drugs Actiq, Gabrivil and Provogil for uses other than what federal regulators approved, and will pay a $40 million fine and $10 million in forfeiture.

Cephalon has also agreed to pay $375 million plus $12 million interest to settle civil claims brought by federal agencies and state Medicaid programs. (The state Medicaid programs and the District of Columbia will share $116 million of the settlement.)

The feds said the off-label marketing of the three drugs began in January 2001 and continued through at least 2006, but the parties stipulated in the plea agreement that the conduct went from January 2001 through Oct. 1, 2001.

Cephalon did not admit any liability or wrongdoing as part of the civil settlement tentatively approved last November.

Doctors can prescribe drugs for uses other than what has been approved by the FDA, but drug companies cannot promote such "off-label" uses, authorities said.

"This company subverted the very process put in place to protect the public from harm, and put patients' health at risk for nothing more than boosting its bottom line," said acting U.S. Attorney Laurie Magid.

Actiq is used to treat pain in cancer patients and is dispensed as a lollipop. Gabitril is an anti-epilepsy drug used to treat seizures, and Provogil is used to treat excessive daytime sleepiness associated with narcolepsy and sleep apnea.

Authorities said that Cephalon's sales reps promoted Actiq for uses in injuries and migraines; Gabitril as a remedy for anxiety, insomnia and pain, and Provogil as a drug for the treatment of sleepiness, lack of energy and fatigue.

Authorities would not say who tipped them off to Cephalon's sales practices, but four whistleblowers - including three former Cephalon sales reps - had filed lawsuits in federal court. They will receive $46.7 million from the federal share of the settlement.

Magid said that authorities had reports that some patients who had been taking the drugs for off-label uses were harmed and that some even died, but she couldn't say whether the off-label use of the drugs was the result of off-label marketing.

In 2005, following reports of seizures in patients taking Gabitril who did not have epilepsy, the FDA required Cephalon to send a warning letter to doctors.

Afterward, Cephalon stopped promoting the drug, authorities said.

The FDA sent Cephalon a letter in 2002 instructing the company not to promote Provogil off-label, but Cephalon ignored the letter, the feds said.

Sales of Provogil, for example, increased from $146.2 million in 2001 to $691.7 million in 2006, the feds said in the plea agreement.

Jerry Pappert, the company's vice president and general counsel, said in a statement: "We are pleased to have these long-standing matters behind us, while preserving our ability to participate in all federal and state health-care programs, thereby maintaining access of patients in those programs to our medications."

Pappert said that Cephalon also had agreed to settle two related state investigations - in Connecticut and Massachusetts - for $6.8 million. *