Teva Pharmaceutical Industries Limited (TEVA)'s Cephalon, Inc. (CEPH) Accused of Fraud by Whistleblower
3/21/2013 8:00:08 AM
Two years ago, the US Attorney in New York opened an investigation into Cephalon, which was since bought by Teva Pharmaceuticals, over allegations of off-label marketing of its Treanda medication for treating chronic lymphocytic leukemia. And now we learn that, in August 2010, a former Cephalon manager filed a whisteblower lawsuit against the drugmaker over alleged illegal marketing of that drug and one other, the Fentora painkiller. The patterns detailed in the lawsuit, which was unsealed a few days ago, are familiar. The allegations, which were made by a former Cephalon employee who is only listed as ‘John Doe,’ describe a host of schemes, such as paying various doctors fees for participating in programs so they would prescribe off-label. And ultimately, these efforts forced federal healthcare programs to overpay for the medications, as well as efforts to However, at the time these activities took place, Cephalon was already operating under a Corporate Integrity Agreement in connection with its 2007 plea to a misdemeanor violation of the Food, Drug and Cosmetic Act for improper marketing of several meds, notably its Provigil narcolepsy drug, which docs were prescribing to treat depression and ADHD. The drugmaker paid a $375 million fine as well. The upshot is that the lawsuit suggests that Cephalon executives knowingly and brazenly again engaged in off-label marketing. What effect this may have on Teva (TEVA) is unclear. For one thing, the Cephalon management has been overhauled and former Cephalon ceo Frank Baldino passed away. The US Department of Justice declined to intervene, or join, the lawsuit, although it would not be surprising if a settlement is later reached with the feds.