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Jazz to pay $20M as subsidiary pleads guilty to misbranding drug

Pharma Compliance Alert, July 18, 2007

Jazz Pharmaceuticals will pay $20 million in civil and criminal payments as part of a settlement deal with the United States. The settlement resolves investigations regarding off-label marketing of Orphan Medical's drug Xyrem, a narcolepsy treatment. Jazz acquired Orphan in 2005, and says the improper marketing occurred before the acquisition.

Orphan pled guilty to one count of felony misbranding of a pharmaceutical product, and the $20 million settlement, which will be paid over five years, includes payments to Medicaid participating states.

According to the Department of Justice, Orphan Medical promoted Xyrem to physicians for off-label uses, including fatigue, insomnia, chronic pain, and weight loss. With company approval, Orphan sales reps called on physicians who did not specialize in narcolepsy and distributed written materials concerning off-label uses. The DOJ also said that Orphan admitted to paying a psychiatrist to give talks to physician about off-label uses. With Orphan's approval, the psychiatrist allegedly made misleading statements about Xyrem in the course off-label promotion and advised physicians how to conceal off-label Xyrem prescriptions to ensure reimbursement, according to the DOJ

Although Jazz Pharmaceuticals says it was not prosecuted or excluded from participating in federal health care programs, the company has entered into a five-year corporate integrity agreement with the OIG. You can read the CIA here.

Go to the DOJ Web site to read more about the settlement.

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