Every industry has its bad actors. In the case of pharmaceutical companies the bad actors fall into two categories; those who in the past have given kickbacks to physicians and those who actively promote off label uses for their products.
In the case of Cephalon they were using their sales force and marketing practices to promote off label uses for three of their drugs:
Cephalon even dedicated part of their sales forces to physicians that would have no reason to prescribe their drugs for approved purposes. The promotion showed: over 80% of the scripts written were for off label uses.
Cephalon has agreed to a $425 million Qui Tam settlement and guilty to one misdemeanor charge. Cephalon Corporate Integrity Agreement "Qui tam" is Latin for "who is as the king," and the False Claims Act allows people to sue on behalf of the government if they have evidence of wrongdoing.
What makes this case unique is that it's the first time, in the absence of substantial kickbacks, that the federal government has used the False Claims Act to go after a pharmaceutical company for marketing drugs for off-label indications for which there were no credible published scientific research supporting these drugs' safety or effectiveness," said Peter W. Chatfield, a Washington, DC, attorney with Phillips & Cohen LLP.
It is an interesting case in that a sales person for Cephalon complained to the FDA and wore a wire to a sales meeting in the investigation.
The Corporate Integrity Agreement includes policies around reporting payments to physicians and disclosing grants including educational and charitable grants.
Some key points in the settlement:
Cephalon agreed to a written code of conduct that included:
A) Compliance with all federal and FDA requirements
B) All personnel, suppliers and consultants will shall be expected to comply with all federal and FDA requirements
C) Reporting of suspected violations to the Cephalon Chief Compliance Officer
D) Consequences for failure to comply and report
E) Disclosure program
Policies and Procedures:
A) Adherence to the “Code of Conduct”
B) Appropriate conduct of promotional and product services functions to meet all federal program requirements including “kickback laws”
C) Appropriate conduct of promotional and product services towards FDA requirements
D) Mechanism for handling off label requests for information including a database of questions and answer and requesters.
E) Development of sales call plans for provider types consistent with FDA approvals.
F) Consultants and other fee-for-service arrangements including (advisory boards, speaker programs, advisory boards) with Healthcare Providers are used for legitimate and lawful purposes, in accordance with FDA and federal healthcare programs.
G) Employee and Field Force Education of Policies and Procedures
H) Sponsorship or Funding of grants (including educational grants and charitable contributions) designed to ensure that Cephalon funding satisfies all applicable federal healthcare and FDA requirements.
I) In Regard to Grants:
a. Cephalon will disclose its financial support of Third Party Educational Activity and any financial relationships with faculty, speakers, or organizers at such activity;
b. as a condition of funding, the third party shall agree to disclose Cephalon' s financial support of the Third Party Educational Activity and any financial relationships that Cephalon might have with faculty, speakers, or organizers at such Activity;
c. any faculty, speakers, or organizers at the Third Party Educational Activity disclose any financial relationship with Cephalon;
d. the Third Patyr Educational Activity have an educational focus;
e. the content, organization, and operation of the Third Party Educational Activity be independent of Cephalon on control;
f. Cephalon support only Third Party Educational Activity that is non-promotional in tone/nature; and
g. Cephalon's support of a Third Party Educational Activity shall be contingent on the provider's commitment to provide information at the Educational Activity that is fair, balanced, accurate and not misleading;
J) Review of promotional materials by (regulatory, medical and/or legal personnel) to ensure adherence to regulations
K) Funding of Medical Research complies with FDA and federal requirements
L) Compensation for relevant covered persons to ensure that these financial incentives do not inappropriately motivate to engage in proper sales and marketing
M) Disciplinary Policies for Violation of Policies and Procedures
Reporting of Physician Payments
By January 31, 2010 Cephalon will post on their website in a searchable website the value of payments to physicians who received any (directly or indirectly) in 2009. For the year 2010, they will have to post quarterly. Reporting will be in $10,000 increments ($0-$10,000, $10,000- $20,000…)
This is the first case of a pharmaceutical company being required to report payments to physicians by their corporate integrity agreement.
This case shows that the system of checks and balances is working. This settlement sets an example that companies who violate the law will pay huge penalties ($425 million is huge; roughly equal to $100 million more than the Cephalon’s entire net income for 2007) and cannot afford to make those same mistakes again. Others who are watching will be quick to make changes to their policies and procedures to avoid such penalties.
Key Resources
Wall Street Journal: Cephalon Agrees to Greater Oversight
AP: Cephalon to pay $425M for improper drug marketing
Cephalon Corporate Integrity Agreement
Philips and Cohen Press Release
Kenney Egan McCafferty & Young, P.C. Press Release
Kenney Cephalon 2003 Complaint
WSJ: Narcotic 'Lollipop' Becomes Big Seller Despite FDA Curbs
If you need evidence that Cephalon’s promotion of Provigil for non-approved uses is a very bad idea, consider my case:
Several years ago, My physician met for the first time with a Cephalon sales representative. Being a doctor who saw many adult ADHD patients, she decided to prescribe Provigil for me for a 3-month trial with an eye towards eventually substituting Provigil for Dexedrine. I had been taking Dexedrine for ADHD for nearly 15 years without problem. However, she became convinced after meeting with the Cephalon rep that Provigil could offer me therapeutic benefit equivalent to that of Dexedrine without posing the cardiac risks associated with amphetamines to someone like me in his middle 50s. Six weeks later, I awoke in a delusional state. 2 hours later I arrived painless at the ER, but highly hypotensive and well into acute renal failure. 30 minutes later, I was in cardiogenic shock, and after the on-call cardiologist inserted an intra-aortic balloon, a helicopter took me to a regional heart center. Finding no typical ECG signs of a myocardial infarction, I remained on a ventilator and on the brink of death for 2 weeks with my kidneys nearly useless. 32 days after I was admitted, I left the hospital for home, alive if barely. A year later, a cardiac MRI disclosed that I had suffered a small subendocardial infarction, usually associated with severe hypotension. I have since learned that hypotension/vasodilation is a side effect which studies have shown to occur in 1 out of every 30users of Provigil.