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Ohio Sales Rep's Information Launched Massive Government Investigation of Cephalon
Date:9/29/2008

Unique off-label marketing case results in $425M settlement

WASHINGTON, Sept. 29 /PRNewswire/ -- The government's investigation into Cephalon Inc.'s illegal marketing practices that culminated in today's $425,000,000 settlement and guilty plea by the pharmaceutical company began in January 2003 with a Cephalon sales representative in Ohio.

The sales representative, Bruce Boise, refused to follow company-ordered sales strategies to convince doctors to prescribe Cephalon's Actiq, Gabitril and Provigil drugs for unapproved ("off-label') uses because he was worried the sales practices were illegal and the "off-label" uses were dangerous for patients.

Boise was so concerned about Cephalon's off-label marketing that he contacted the Food and Drug Administration (FDA) to inform them of what the company was doing and then agreed to wear a wire to a company sales conference to help the government gather evidence.

The decision to report Cephalon to the FDA cost Boise his job and future employment in the pharmaceutical industry. But his information helped end Cephalon's illegal marketing practices that put patients at risk and led to today's settlement.

Cephalon Inc. (Nasdaq: CEPH), a pharmaceutical company based in Frazer, Pennsylvania, will pay the federal government and numerous states a total of $375 million to settle four "qui tam" (whistleblower) lawsuits alleging Medicare and Medicaid fraud involving the sales and marketing of Actiq, Gabitril and Provigil between 2001 and 2006. At the same time, Cephalon has agreed to plead guilty to a criminal charge involving off-label marketing of the drugs and will pay a $50 million fine.

"What makes this case unique is that it's the first time, in the absence
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SOURCE Phillips & Cohen
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