Cephalon Inc., the biotechnology company founded by Temple trustee and alumnus Frank Baldino, Jr., is being sued by the Federal Trade Commission for what it calls “anti-competitive conduct.”
The FTC filed the complaint Feb. 13, with allegations stemming from an agreement Cephalon allegedly made with its competitors to delay a generic version of Provigil, a sleep disorder drug.
According to the FTC, an agreement was made two years ago which would block access to lower-cost generic drugs, forcing consumers to pay for a name brand product. Cephalon agreed to pay four competing companies – Teva Pharmaceuticals, Mylan Pharmaceuticals, Barr Pharmaceuticals and Ranbaxy Laboratories – a share of its revenues from Provigil, which generated $852 million last year.
In a statement released by the company, which is based in the Philadelphia suburb of Frazer, “Cephalon stands by the strength and validity of our Provigil patents and the legal basis for these settlements. We are disappointed that the FTC has determined to challenge these agreements as we believe they fully comply with both the spirit and letter of the anti-trust laws. Cephalon is prepared to vigorously defend itself in this matter and expects to prevail.”
This is not the first time Cephalon has come under fire over Provigil, which is prescribed to those who suffer from sleep disorders such as narcolepsy and obstructive sleep apnea.
In November 2007, a federal court ordered Cephalon to pay $425 million under an agreement with the U.S. attorney in Philadelphia and the Justice Department over an investigation of the company’s sales and marketing practices, according to the Food and Drug Administration. The investigation focused on off-label marketing, or marketing drugs for uses the FDA hasn’t approved. In this case, Cephalon promoted that Provigil could be used to treat various disorders such as attention deficit hyperactivity disorder and depression.
The investigation also included Actiq, a strong narcotic prescribed to cancer patients when other pain medications no longer have an effect. It has been linked to more than 100 deaths, according to a study conducted by Prime Therapeutics. The 2006 study showed the majority of prescriptions written for Actiq were for non-cancer patients and that off-label marketing was to blame.
“You know when your patents are running out, or can be threatened, so what you do is build your business so as to mitigate the impact [of losing a patent battle],” Baldino said in defense of his company. “We believe we have a very strong patent position for Provigil, but we’ve seen pharmaceutical companies with seemingly insurmountable patents lose. You can never guess what a judge or jury will say.”
Brad Larrison can be reached at brad.larrison@temple.edu.
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