Attorney General Martha Coakley's Office Recovers $4.65 Million For Massachusetts Medicaid Program In Cephalon Off-Label Marketing Investigation

Main Category: Litigation / Medical Malpractice
Article Date: 02 Jan 2009 - 2:00 PDT

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Attorney General Martha Coakley's Office has reached an agreement with Cephalon, Inc. (Cephalon), based in Pennsylvania, to settle allegations of improper off-label marketing of three pharmaceutical products. Under the terms of the settlement, Cephalon has paid $4,659,461.32 to the Massachusetts Medicaid Program, also known as MassHealth, which provides funds for health care products and services to eligible low-income individuals, including people with disabilities, children and elder citizens.

"Our office will not tolerate fraudulent activities by pharmaceutical manufacturers, or other medical service providers. These companies are expected to operate with honesty and integrity," Attorney General Coakley said. "Our Office will continue to participate in the coordinated national effort to root out deceptive business practices that divert funds from a program that provides essential services to our neediest citizens."

The Attorney General's settlement resolves claims that were a part of four separate qui tam lawsuits that were consolidated in federal court in Philadelphia. The Medicaid portion of the settlement is part of a combined criminal and civil resolution of a five-year investigation of these claims against Cephalon conducted by the U.S. Department of Justice, the U.S. Attorney's Office for the Eastern District of Pennsylvania and a team from the National Association of Medicaid Fraud Control Units (NAMFCU). The settlement resolves allegations that Cephalon engaged in improper off-label marketing of three products:

- Provigil: This product is FDA-approved for the treatment of narcolepsy and sleep disorders, but Cephalon marketed it as a non-stimulant medication to treat a variety of conditions, including depression, schizophrenia, multiple sclerosis, Parkinson's disease and fatigue.

- Gabitril: Gabitril is FDA-approved as an adjunct treatment for seizures. In spite of this limited approval, Cephalon marketed Gabitril as a remedy for anxiety, insomnia and pain. The FDA had taken action against Cephalon following reports of seizures in patients who took Gabitril to treat conditions other than epilepsy, and required the company to send a warning to physicians advising them of the risks of seizures in connection with off-label Gabitril use.

- Actiq: This highly addictive Schedule II pain medication is formulated for oral administration as a narcotic "lollipop," and was FDA-approved to treat opioid-tolerant cancer patients and other patients for whom morphine-based pain medications are no longer effective. Cephalon marketed Actiq for a number of other conditions, including migraines, sickle-cell pain crises, various types of injuries, and as a painkiller to be administered in anticipation of radiation therapy and the changing of wound dressings.

The total amount of the settlement to the state Medicaid programs nationwide is approximately $248 million, with $4,659,461.32 (state and federal shares) allocated to the Massachusetts Medicaid program. In addition to the monetary terms of the settlement, Cephalon has agreed to enter a guilty plea to a misdemeanor charge of misbranding in violation of the Food, Drug, and Cosmetic Act, and as part of the plea has agreed to pay a $50 million criminal fine. The Company has also agreed to the terms of a Corporate Integrity Agreement (CIA), which will be implemented and monitored by the Office of the Inspector General for the U.S. Department of Health and Human Services (HHS-OIG). The terms of the CIA are available on the HHS OIG website, and includes provisions that ensure that the conduct at issue in this investigation does not recur.

The Massachusetts portion of the settlement was handled by Assistant Attorney General Robert Patten, with assistance from Data Analyst Anthony Megathlin, both of Attorney General Martha Coakley's Medicaid Fraud Division.

http://www.mass.gov/ago