Cephalon: The Quotas Reached Beyond the Labels

In the Cephalon Actiq, Gabitril and Provigil settlement, the company agreed to pay $375 million to resolve civil allegations that its off-label promotion caused government claims for uncovered uses. A criminal information filed against Cephalon reached inside the sales operation: it alleged that representatives had quotas and bonuses they could meet only by selling beyond the drugs’ approved uses. For someone who knows how a pharmaceutical sales target becomes a physician call, that is the part of this case worth recognizing.

The Department of Justice announced the resolution on September 29, 2008. Cephalon, a pharmaceutical company headquartered in West Chester, Pennsylvania, faced allegations involving a cancer-pain drug, an epilepsy drug and a drug for excessive sleepiness. This pharmaceutical fraud case began with former employees who knew the promotion from inside the business.

What Is Considered Off-Label Promotion?

Off-label promotion means promoting a drug for a use outside those approved by the Food and Drug Administration. The Cephalon allegations concerned both the conditions the drugs were promoted to treat and, in the criminal information, the patients the sales campaign sought to reach.

A drug’s commercial identity includes its approved use, strength and dosage form. Those details shape what the manufacturer can sell it as. Here, the criminal information described the sales operation expanding the market beyond those approved uses, product by product.

Actiq Reached Beyond Cancer Pain

Actiq was approved for breakthrough cancer pain in opioid-tolerant patients, to be prescribed by oncologists or pain specialists familiar with opioids. It contained fentanyl and came in a lollipop form. From 2001 through at least 2006, the criminal information alleged, Cephalon promoted it for non-cancer uses including migraines, sickle-cell pain crises and injuries, and also for patients who were not opioid-tolerant. The information said use in those patients could have life-threatening results.

The criminal information attributed the mantra “pain is pain” to the Actiq campaign. According to the information, Cephalon directed representatives toward physicians other than oncologists, including general practitioners, to promote uses beyond breakthrough cancer pain.

That slogan did commercial work. It treated the restriction to a particular patient population as something the sales force could talk past. A representative’s call list could show the same expansion that appeared in the pitch.

Gabitril Reached Beyond Epilepsy

Gabitril was approved to treat partial seizures in patients with epilepsy. From 2001 to 2005, the criminal information alleged, Cephalon promoted it for anxiety, insomnia and pain. The information said the company directed its sales force to visit psychiatrists as well as neurologists and promote psychiatric uses.

According to the information, in 2005, after reports of seizures in patients taking Gabitril who did not have epilepsy, the Food and Drug Administration required Cephalon to send doctors a warning about that connection. The company then stopped promoting the drug.

The difference between the approved and promoted use had consequences for the people taking it. By the information’s account, an epilepsy medicine was being sold for other conditions when reports emerged of seizures in people without epilepsy.

Provigil Reached Beyond Specified Sleep Disorders

Provigil was first approved for excessive daytime sleepiness associated with narcolepsy. Its label later expanded to excessive sleepiness associated with sleep apnea and shift work sleep disorder. The criminal information alleged that from 2001 through 2006, Cephalon promoted it more broadly as a non-stimulant treatment for sleepiness, tiredness, decreased activity, lack of energy and fatigue.

The information said the Food and Drug Administration told Cephalon in 2002 to stop promoting Provigil off-label, and alleged that the company ignored the letter. By that account, a product approved for sleepiness associated with specified disorders was being pitched for the much broader experience of feeling tired.

Sales Quotas and Education Grants Carried the Campaign

The criminal information alleged that Cephalon trained its representatives to disregard label restrictions and set sales quotas and bonuses that required off-label sales to reach the goals. The compensation plan mattered because it turned the broader market into a target employees were expected to meet.

According to the information, the company identified additional prescribers, supplied the message and rewarded the resulting volume. The approved label described one market. The sales plan, as the information described it, demanded another.

The criminal information alleged that the campaign also reached doctors through medical professionals retained to speak about off-label uses. According to the information, Cephalon funded continuing medical education through millions of dollars in grants to promote those uses. For an employee involved in educational funding, the relevant connection is who chose the subject, who delivered the message and how that message served the sales campaign.

The earlier Warner-Lambert and Parke-Davis Neurontin case shows why the educational channel deserves attention. The government alleged promotion through medical liaisons and purported independent education, including planted audience questions to counter unfavorable remarks about the drug. A former medical liaison brought that whistleblower case. The parallel is the use of apparent scientific authority to carry a commercial message to prescribers.

From a Prescription to a Government Claim

The civil allegation against Cephalon connected promotion to government payment: the company allegedly caused claims for uses the programs did not cover.

In the prescription business, the manufacturer can influence the prescription while a pharmacy or physician submits the claim.

For Medicaid, medically accepted indications include FDA-approved uses and uses supported by specified drug reference works. That makes the indication, meaning the condition for which the drug was prescribed, an essential part of understanding the payment. We connect what the company promoted to the actual use and the coverage rules governing the resulting claim.

A later article in Managed Care, Indication-Specific Drug Pricing–Simple in Theory, Complex in Reality, describes a practical obstacle to following that connection. Its discussion of paying different prices for different uses explains that the condition being treated may appear in the medical record without reaching the dispensing transaction:

That is why an insider’s knowledge matters alongside healthcare claims data. A payment entry identifies a transaction. The clinical record and the company’s promotional materials can help explain the use behind it. In a promotion case, we work with the insider to connect those parts of the story.

Former Employees Brought the Cases

The civil settlement resolved four qui tam cases. The Justice Department identified three as cases brought by former Cephalon sales representatives concerned about the off-label marketing practices.

Those roles matter because the conduct alleged here ran through ordinary sales work. A representative could know which physicians management wanted visited, which uses the training emphasized and what sales counted toward a bonus. Someone working with grants or speakers could know how the same product message reached doctors through an educational program.

The case puts pharmaceutical whistleblowers close to the decisions that made the campaign work. From inside the business, an employee can compare the label, the training message and the sales expectation.

The Civil Settlement Reached Federal and State Programs

The civil settlement covered claims involving Medicaid, Medicare and other federal programs and agencies, including TRICARE, federal employee health benefits and the Department of Veterans Affairs. State Medicaid programs and the District of Columbia were allocated $116 million of the civil settlement. The government alleged that taxpayers paid for prescriptions those health care programs did not cover.

The resolution also included a five-year Corporate Integrity Agreement with the HHS Office of Inspector General. As the Justice Department described it, Cephalon had to notify doctors about the resolution, give them a way to report questionable sales conduct and publish payments to doctors on its website. Its board and top management also had to certify regularly that the company maintained an effective compliance program and complied with applicable requirements.

How Much Money Do Pharmaceutical Whistleblowers Get for Exposing Fraud?

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. In the Cephalon case, the announced whistleblower reward was about $46.5 million from the federal share, to be shared among the plaintiffs under a separate agreement.

What Evidence Is Needed to Prove Fraud?

For a promotion case, we examine evidence connecting the company’s instructions and incentives to prescriptions and government claims. In Cephalon’s case, the conduct described in the criminal information points to sales training, physician targeting, quota and bonus plans, speaker arrangements and education grants as places where an insider could understand the campaign.

Clinical and payment records can connect that campaign to the prescriptions public programs paid for.

An insider may know the instruction that makes those records intelligible: why the territory changed, why a specialty became a target or why a particular use kept appearing in the training. That is the knowledge we develop with you into a pharmaceutical fraud case.

You Know What the Sales Plan Required

If you know how a drug’s sales targets, training or education grants pushed an uncovered use, speak with our whistleblower experts. We connect your account of the campaign to the government-payment case and bring in pharmaceutical fraud whistleblower lawyers who understand promotion and reimbursement. We stay beside you as that inside knowledge becomes the foundation of your case.