Provigil Maker Cephalon Suffers Two Hefty Blows

     PHILADELPHIA (CN) – Embattled drugmaker Cephalon failed Wednesday to swat down federal conspiracy claims and a Federal Trade Commission disgorgement action.
     Both cases date back to 2008, with the FTC taking issue with so-called “reverse-payment” settlements that Cephalon struck with competing drugmakers, paying them millions to stop them from introducing generic versions of its blockbuster narcolepsy drug Provigil until 2012.
     U.S. District Judge Mitchell Goldberg noted Wednesday that he found one Cephalon patent invalid in a related 2011 trial, but that he stayed the FTC action pending the U.S. Supreme Court’s guidance on reverse-payment settlement claims.
     When that much-anticipated decision, FTC v. Actavis, appeared in 2013, the gratified FTC told Goldberg that it would “potentially be looking for some redress of the consumer harm that’s been caused by the years and years of delayed generic entry.”
     Since the Provigil generic modafinil entered the market in 2012, however, Cephalon claimed that the court should dismiss the FTC’s action.
     It said injunctive relief was now moot, while damages would be inappropriate.
     Goldberg kept the case going last year and said Wednesday that Cephalon cannot stop the FTC from seeking disgorgement.
     Though the drugmaker complained that consumers could obtain duplicative relief in private-plaintiff actions, Goldberg said “there is no way to predict the outcome of the private plaintiff’s antitrust lawsuits.”
     “Moreover, the FTC explains that any award obtained pursuant to its proposed disgorgement remedy would be placed in a Consumer Relief Fund and would be used to satisfy any claims in the private plaintiff cases,” the decision concludes.
     U.S. District Judge Thomas Goldstein meanwhile presides over the False Claims Act complaint against Cephalon in which the drugmaker’s former employees accuse it of defrauding the U.S. government by submitting false claims for reimbursement for prescriptions of Provigil and its successor since 2007, Nuvigil, based on illegal off-label promotion.
     Cephalon pleaded guilty in 2008 to the misbranding through off-label promotion of Provigil, Gabitril and Actiq.
     Goldstein tossed a few of the claims Wednesday against Cephalon but allowed many of the big-ticket allegations to advance.
     The 27-page opinion bars claims involving the drugmaker’s conduct under the laws of Delaware, Georgia, New Jersey, Oklahoma and Rhode Island that were not yet enacted.
     It also orders the plaintiffs to amend the claim “that Cephalon made ‘reverse’ false claims … by failing to comply with the Corporate Integrity Agreement (CIA) it entered into with the Office of the Inspector General (OIG) of the U.S. Department of Health and Human Services.”
     Cephalon failed to upend False Claims Act claims premised on allegations of Cephalon’s off-label promotion of Provigil and Nuvigil, and premised on allegations of Cephalon’s payment of illegal kickbacks.
     Goldstein also advanced the FCA conspiracy claims and claims under the New York False Claims Act based on conduct occurring before April 1, 2007.

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