Bloomberg News

Cephalon Gets U.S. Justice Department Subpoena for Top-Sellers

September 30, 2011

Sept. 30 (Bloomberg) -- Cephalon Inc. received a subpoena from the U.S. Justice Department asking for information about the marketing of Nuvigil and Provigil, the company’s best- selling medicines to promote wakefulness.

Cephalon, based in Frazer, Pennsylvania, said it will fully cooperate and is responding to the request, which was disclosed in a filing with the U.S. Securities and Exchange Commission.

Nuvigil is the subject of a $3.6 million radio campaign by Cephalon, as reported by Bloomberg Businessweek last month. The advertising promotes the drug’s ability to help shift workers stay alert on the job without impeding their ability to sleep during the day. The company also is spending $490,000 on an Internet campaign featuring the “Wake-Up Squad” and informational booths at community events to promote Nuvigil.

The subpoena focuses on a “limited number” of promotional activities that the company fully vetted to make sure they complied with all laws and regulations, said Natalie deVane, a company spokeswoman, in an e-mailed statement. Cephalon has fulfilled all of the requirements under a five-year corporate integrity agreement it entered into in 2008 and will continue to do so, she said.

Teva Takeover

Israel’s Teva Pharmaceuticals Industries Ltd. agreed in May to buy Cephalon for $6.2 billion in part because of Nuvigil’s prospects. Nuvigil is the company’s second-generation wakefulness drug, designed to work longer than the original pill Provigil, Cephalon’s best-selling narcolepsy medication that is losing patent protection next year.

Cephalon lost a bid in 2010 to dismiss antitrust lawsuits, including one by the U.S. Federal Trade Commission, which accused it of improperly delaying Provigil’s competition by entering into patent-infringement settlements with generic drugmakers. The company, which denies violating antitrust law, signed four patent settlements with generic-drug makers so they wouldn’t begin sales until 2012. The FTC claims Cephalon “bought off” the potential rivals by agreeing to pay more than $200 million if they dropped their challenges to a patent on the medicine.

In November 2007, Cephalon agreed to pay $425 million to settle a U.S. investigation into its sales and marketing practices for drugs. A year later the company agreed to pay $6.85 million to settle state probes into its marketing of drugs for unapproved uses, including Provigil.

--With assistance from Susan Decker in Washington. Editors: Bruce Rule, Andrew Pollack

To contact the reporter on this story: Michelle Fay Cortez in Minneapolis at mcortez@bloomberg.net

To contact the editor responsible for this story: Reg Gale at rgale5@bloomberg.net


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