Attorney General John R. Kroger announced today that Oregon will receive $2.1 million as part of a national medical fraud settlement with pharmaceutical manufacturer Cephalon, Inc. As part of the deal, Cephalon pleaded guilty to violating federal food and drug laws. The Oregon Department of Justice alleged that Cephalon marketed and promoted three prescription drugs for uses paid with Medicaid funds that had not been approved by the federal Food and Drug Administration.
The Oregon Medicaid Program will be credited with $2.1 million as a result of the settlement, which involved the drugs Actiq, a highly addictive painkiller; Gabritril, an anti-seizure drug; and Provigil, a sleep disorder drug.
Oregon helped lead a joint enforcement effort between the U.S. Department of Justice, the United States Attorney’s Office for the Eastern District of Pennsylvania and representatives of the National Association of Medicaid Fraud Control.
The settlement requires Cephalon pay the states and federal government a total of $375 million in damages and penalties for Medicaid and other federal health care programs. The settlement reimburses the federal government and the state Medicaid Programs for excessive amounts the State Medicaid Programs paid for these 3 drugs as a result of Cephalon’s improper off-label marketing. The $2.1 million allocated to Oregon from the settlement represents restitution, penalties and interest on payments Oregon Medicaid expended for these three products.
Also under the joint federal and state agreement, Cephalon pleaded guilty in United States District Court in the Eastern District of Pennsylvania to a one count misdemeanor violation of the Food Drug and Cosmetic Act in marketing its drugs for unapproved uses and will pay a fine of $50 million. Cephalon also entered into a Corporate Integrity Agreement with the Department of Health and Human Services, Office of the Inspector General, which requires strict scrutiny of its future marketing and sales practices.
The case was handled by Senior Assistant Attorney General Sheen Wu of the Oregon Department of Justice’s Medicaid Fraud Unit.
Contact:
Tony Green, (503) 378-6002 tony.green@doj.state.or.us