Projo Biz Blog

Rhode Island has recovered $762,600.30 in an agreement with pharmaceutical manufacturer Cephalon Inc., in a case involving Medicaid fraud.

Of that amount, $327,952.01 will be forwarded to the Department of Human Services. The balance represents the federal portion of the Medicaid recovery and will go to the US Department of Justice.

The $762,600.30 is the state's share of a $375 million agreement nationwide. In a plea agreement, Cephalon will pay an additional $50 million to resolve a charge by the Office of the US Attorney for the Eastern District of Pennsylvania alleging a misdemeanor violation of the Food, Drug, and Cosmetic Act.

The settlement totaling $425 million resolves allegations that Cephalon promoted the drugs Provigil, Gabitril, and Actiq for uses other than what the Food and Drug Administration approved. Cephalon also funded continuing medical education programs, through millions of dollars in grants, to promote off-label uses for these drugs. It is illegal for pharmaceutical manufacturers to promote the off-label use of their drugs, even though doctors are permitted to prescribe for such uses.

"Cephalon's illegal sales and marketing tactics concerning these medications are shameful," said Attorney General Patrick C. Lynch , whose office of Medicaid Fraud Control and Patient Abuse made the recovery.

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