It's a dispute that should send a chill up Big Pharma's spine. Cephalon has sued Travelers ($TRV) over the insurer's attempt to claw back off-label drug spending. Travelers was trying to collect $17.4 million spent on the pain drug Actiq, saying the charges stemmed from off-label promotions, Reuters reports.
Cephalon, now owned by Teva Pharmaceutical Industries ($TEVA), settled off-label marketing claims with the Justice Department in 2008. The drugmaker agreed to pay $425 million to wrap up allegations that it promoted Actiq and two other drugs for uses unapproved by the FDA.
Actiq, the drug fentanyl in lollipop form, is approved for breakthrough pain in cancer patients using opioids for relief. The Justice Department claimed that Cephalon promoted the drug for all sorts of pain, including migraines and wound-care treatment.
Travelers demanded repayment for more than 8,400 Actiq prescriptions for back strain, bone fractures, burns and other uses. Cephalon says Travelers has no right to sue because FDA is in charge of policing off-label promotions.
Cephalon is far from alone in its off-label marketing deal with the DoJ. A who's who in pharma have agreed to pay hundreds of millions--even billions--to wrap up allegations that they promoted their drugs for unapproved uses. If Travelers were to succeed in recovering money spent on off-label use, then any drugmaker that's been in hot water for mismarketing could potentially be liable, too.
- read the Reuters news