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Attorney General's News Release

January 29, 2009

Attorney General's Office provides $1.4 million check to Department of Social Services from Medicaid fraud case

Jefferson City, Mo. - The Attorney General's office today presented the Missouri Department of Social Services with a check for $1,432,043, the result of a nationwide settlement with Pennsylvania pharmaceutical company Cephalon. Overall, the office's Medicaid Fraud Control Unit recovered more than $3.8 million for taxpayers in the agreement with Cephalon, which marketed three of its drugs for uses not approved by the Food and Drug Administration and rewarded some doctors who frequently prescribed the drugs. As a result of the scheme, the three drugs made by Cephalon Inc. were prescribed more often than they normally would have been, and Medicaid programs in Missouri and the other states paid too much in reimbursement for the drugs.

Under the agreement that resolves the allegations of off-label marketing, Cephalon will pay a total of $425 million in damages and penalties to Missouri, the federal government and 49 other states. Missouri share of the settlement is $3, 813,757, with $1,432,043 going to the Missouri Department of Social Services and $2,381,714 going back to the federal government. With this recovery, the Attorney General's Medicaid Fraud Control Unit has recovered more than $120 million for taxpayers in Medicaid fraud cases.

Cephalon, based in West Chester, Penn., engaged in the off-label marketing of the following drugs:

• Actiq, approved by the FDA to treat severe pain from cancer. Cephalon marketed the highly addictive narcotic beyond oncologists to general practitioners and internists.

• Gabitril, approved as an anti-epileptic drug to treat seizures. Cephalon marketed it for conditions including depression, anxiety, Tourette's syndrome and chronic pain. Patients who were not suffering from seizures subsequently experienced seizures as a result of taking the drug to treat other conditions.

• Provigil, approved to treat narcolepsy and sleep disorders. Cephalon marketed it for a wide variety of other conditions including fatigue, depression, multiple sclerosis, schizophrenia, Parkinson's disease, chronic fatigue syndrome, anxiety, neuropathic pain, and attention deficit/hyperactivity disorder in children. Provigil became one of Cephalon's best-selling drugs.

Cephalon's off-label marketing campaign included subsidizing the production and dissemination of reports favorable to off-label uses, having a sale program with incentives to sales staff to promote off-label uses, and rewarding high-prescribing doctors with grants, speakerships and perceptorships. Cephalon also sponsored Continuing Medical Education (CME) programs to fund expensive vacations for physicians, and disseminated off-label promotional literature to physicians at these CMEs.

The Missouri case was brought by the Attorney General's Medicaid Fraud Control Unit, which was established by Attorney General Jay Nixon in 1994. The unit has authority under state law to investigate and prosecute, both civilly and criminally, allegations of fraud against Missouri's Medicaid program.


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