Life Sciences

Cephalon finalizes $425M false claims settlement

Pharma Compliance Alert, October 1, 2008

Cephalon agreed to pay $425 million in civil and criminal penalties and entered into a corporate integrity agreement (CIA), according to a Department of Justice (DOJ) press release.

Cephalon and the DOJ agreed in principle to the settlement in November 2007, but did not finalize it until September 28.

Former employees filed four whistleblower lawsuits claiming Cephalon marketed Gabitril, Actiq, and Provigil for unapproved uses and caused false claims to be filed. The government’s suit also alleged Cephalon marketed products for off-label uses between January 2001 and 2006.

According to the DOJ, Cephalon:
  • Trained sales representatives to disregard restrictions of the FDA-approved label
  • Employed sales representatives and healthcare professionals to speak to physicians about off-label uses of the three drugs
  • Funded continuing medical education to promote off-label uses

Cephalon will pay $50 million to resolve the off-label marketing allegations and $375 million, plus interest, to resolve False Claims Act allegations.

As part of its CIA, Cephalon must:

  • Advise physicians about the settlement
  • Post payments to physicians on its Web site
  • Regularly certify the company is in compliance with all applicable requirements

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