Cephalon Inc. has reached a settlement with federal prosecutors over charges that the drug maker illegally marketed its narcotic painkiller Actiq, as well as two other drugs, <"http://www.yourlawyer.com/topics/overview/provigil_sjs">Provigil and Gabitril.Â In addition to paying a fine of $425 million, Cephalon will plead guilty to a criminal misdemeanor for the illegal off-label marketing of its drug.
Actiq, sold as a lozenge on a stick, has been implicated in over 120 fatalities, including the deaths of two children who thought the drug was candy.Â Actiq contains fentanyl, a highly addictive opiate that is 80 times more potent than morphine. Fentanyl is considered a Class II substance by the Drug Enforcement Administration, meaning it is associated with a high potential for abuse and a risk for fatal overdose. While Actiq was only approved for treating pain in cancer patients, a November 2006 Wall Street Journal investigation found that 80-percent of patients taking Actiq did not have cancer.
Once a drug has been approved by the Food & Drug Administration (FDA), doctors are free to prescribe it as they see fit. However, drug companies are prohibited from advertising a drugâ€™s off-label uses.
According to U.S. prosecutors, Cephalon marketed Actiq to doctors as a treatment for migraines and injuries.Â The company used lavish physician-education conferences and a compensation and bonus structure to encourage off-label use of Actiq. The company also had its sales people market Actiq to doctors who did not treat cancer patients.Â As a result of these illegal practices, sales of Actiq rose from $50 million in 2001 to $500 million in 2006.
Prosecutors said thatÂ Cephalon used the same tactics to illegally market the epilepsy drug Gabitril as a treatment for anxiety, insomnia and pain; and promoted the use of the narcolepsy medication Provigil for fatigue and other ailments.
The $425 million settlement includes a $375 million civil settlement, a $40 million criminal fine and $10 million in criminal forfeiture, prosecutors said.Â A share of the settlement – $46.5 million â€“ will go to former Cephalon sales representatives who acted as whistleblowers and reported the companyâ€™s illegal marketing practices to authorities.Â Most of the settlement will be used to reimburse state Medicare plans.Â Â Â In addition to the fine, Cephalon will also pay more than $12 million in interest.
While the company has agreed to plea to a misdemeanor charge, prosecutors had considered levying a more serious felony charge against Cephalon.Â Prosecutors said they did not want a felony charge to hinder the companyâ€™s ability to sell the drugs to people who truly needed them.