$425 Million Settlement In “Off-Label Marketing” Case

The Department of Justice recently announced that Cephalon, Inc., a biopharmaceutical company, will pay $425 million to settle “off-label marketing” charges relating to three drugs, Gabtril, Actiq and Provigil.  When Cephalon applied to the FDA for approval to sell these drugs, Cephalon specified the intended uses of each of the drugs.  Then, once the FDA gave its approval to sell the drugs, Cephalon developed a marketing plan intended to convince doctors to prescribe the drugs for uses beyond those approved by the FDA.  This is what is meant by “off-label marketing.”  But how does thattranslate into a False Claims Act case?  The theory is that Cephalon’s marketing campaign caused doctors to prescribe the drugs for non-approved uses, and that those prescriptions violated regulations governing Medicaid, Medicare and other similar federal programs, which will pay for prescribed drugs only if the prescriptions are for FDA-approved uses.  The primary qui tam relators who initiated the case were former Cephalon sales representatives.  The relators will share approximately $46.5 million, as their share of the settlement.  Not a bad commission!  To read the full DOJ press release on this case, click here.

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