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January 06, 2009
AG McKenna announces $650,000 settlement with Cephalon, Inc.

Washington State nets funds for general fund and Medicaid programs from settlement with makers of sleep, seizure, and pain drugs

OLYMPIA--Attorney General Rob McKenna today announced that Washington State received nearly $650,000 from Cephalon, Inc., to settle allegations of improper off-label marketing of three pharmaceutical drugs.

“This settlement has delivered more than a quarter million dollars to our state’s dwindling general fund and to the program that provides health care for our neediest citizens,” McKenna said. “This is the latest in a series of settlements we’ve reached with drug companies that have illegally marketed drugs for uses not approved by the FDA.”

As a result of the settlement, the state general fund will receive about $204,000 and the state’s Medicaid program will be paid $110,000 in restitution. In addition, about $335,000 will be paid to the federal government to offset its share of funds improperly distributed on behalf of state Medicaid recipients.


In October Washington State joined other states and the federal government in reaching an agreement with pharmaceutical manufacturer, Cephalon, Inc. to settle allegations of inappropriate off-label marketing of three pharmaceutical drugs.  As a result, Cephalon agreed to pay the states and the federal government $375 million in damages and penalties for Medicaid and other federal health care programs.  Additionally, Cephalon entered a guilty plea in the United States District Court in the Eastern District of Pennsylvania to the misdemeanor violation of the Food, Drug, and Cosmetic Act and will pay $50 million in criminal fines.

The federal and state settlements are a result of several False Claims Act actions alleging that Cephalon improperly marketed the prescription drugs Provigil, Gabitril and Actiq for indications not approved by the FDA (“off-label”uses.) 

  • Provigil: Although FDA-approved to treat only narcolepsy and sleep disorders, Cephalon marketed Provigil for a wide array of other conditions including fatigue, depression, multiple sclerosis, schizophrenia, Parkinson’s disease, chronic fatigue syndrome, anxiety, neuropathic pain, and attention deficit/hyperactivity disorder in children.
  • Gabitril: Although FDA-approved only as a treatment for seizures, Cephalon marketed Gabitril for conditions including depression, anxiety, Tourette’s syndrome, and chronic pain.  Patients who were not suffering from seizures (the only condition that Gabitril was approved to treat) subsequently experienced seizures as a result of taking the drug to treat other conditions.
  • Actiq: Although FDA-approved to treat only cancer pain, Cephalon marketed this highly addictive drug to general practitioners and internists in its campaign to expand the market beyond oncologists.

In addition to the settlement, Cephalon has entered into a Corporate Integrity Agreement (CIA) with the U.S. Department of Health and Human Services and the Office of the Inspector General requiring strict scrutiny of its future marketing and sales practices.

A team from the National Association of Medicaid Fraud Control Units participated in the investigation and represented the interests of the states during negotiations with Cephalon, Inc.  Team members included representatives from South Carolina, Oregon, Ohio, and Virginia.  Washington State Medicaid Fraud Control Unit (MFCU) Director Dawn Cortez coordinated the settlement for the State of Washington.  Terry Tate, Investigator with the MFCU and Daniel Hughes, Data Analyst with the Medicaid Program provided data analysis and production. 



Janelle Guthrie, AGO Communications Director, (360) 586-0725

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