The Rise and Fall of Provigil - Part II
A little over a year after the Volkow study reported that Provigil (modafinil), affects the same brain chemicals as
stimulants and may be addictive, on July 20, 2010, in the Atlanta Science News Examiner, Kevin Murnane reported that
research showed modafinil "produces some effects that are similar to abused stimulants, such as cocaine."
In what may turn out to be the final nail in the modafinil coffin, rhesus monkeys were given modafinil prior to
undergoing behavioral, neurochemical, and brain imaging studies for a study led by Monica Andersen, conducted at the
Yerkes National Primate Research Center at Emory University, in the June 2010, "Psychopharmacology" journal.
"Similar to other stimulants, these researchers found that modafinil increased movement or locomotion in their
subjects," Murnane wrote. "Furthermore, an acute bolus of modafinil elicited a return or reinstatement of cocaine
self-administration that had been previously diminished through extinction training."
"These behavioral effects are very consistent with those of other stimulant-type drugs," he reported.
Mechanistically, the researchers found "using Positron Emission Tomography (PET) imaging that modafinil bound to and
occupied a protein in the brain called the dopamine transporter," he explained. "This protein is the same one that
cocaine binds to."
"Furthermore, they found that modafinil increased dopamine neurotransmission," Murnane said. "This is the same mechanism
thought to mediate the euphoric and addictive properties of cocaine."
He pointed out that the findings "closely paralleled those of a study by Volkow and colleagues in human subjects that
was published in the March 2009 issue of the Journal of the American Medical Association."
"Collectively, these studies show that modafinil has similar behavioral and pharmacological effects to stimulant-type
drugs of abuse, such as cocaine," he wrote.
"These data indicate that modafinil has the potential to be abused or produce dependence," Murnane said. "Accordingly,
closer monitoring of the modafinil supply and abuse patterns may be warranted."
In June 2010, when the European Medicines Agency recommended restricting the use of modafinil for the treatment of
narcolepsy only, on Pharmalot, Ed Silverman said the issue to watch was what this meant for Cephalon’s Nuvigil. For the
moment, EMA may have given Cephalon a boost, "especially since the FDA keeps delaying approval to use Nuvigil for
jet-lag disorder and studies for other indications have either flopped or will take quite awhile to complete," he wrote.
"A similar step to restrict Nuvigil, of course, would make it harder to broaden the Nuvigil market," he pointed out, and
noted that the drug's label states: "Psychiatric adverse experiences have been reported in patients treated with
modafinil. Modafinil and armodafinil (NUVIGIL) are very closely related. Therefore, the incidence and type of
psychiatric symptoms associated with armodafinil are expected to be similar to the incidence and type of these events
with modafinil."
However, the Frazer, Pennsylvania-based firm's Annual Report for 2009, does not show Nuvigil as approved for use in any
other country besides the US.
Unprecedented Price Gouging
On November 18, 2008, Pharmalot reported that Cephalon had raised the price on Provigil by 28% since March 2008. The
drug was then 74% more expensive than four years earlier, with an average wholesale price of $8.71 per pill.
The price hikes were in preparation for the expected launch of Nuvigil in 2009. By sharply raising prices, Cephalon
hoped to convert patients to Nuvigil before cheap generic versions of Provigil came on the market.
A year later, Dow Jones reported that in November 2009, Cephalon had raised the price on Provigil by 29%, to $13.62 a
pill, and that the cost of Nuvigil, launched in June 2009, with patent protection until 2023, was $8.98 per tablet. Five
years earlier, "Provigil's cost was $5.53 per pill," Dow Jones noted on December 22, 2009.
Nuvigil Launch
In launching Nuvigil, in addition to promotional efforts in the field, Cephalon "initiated patient sampling programs,
discount programs for patients, a significant number of key opinion leader/speaker presentations, and a contracting plan
with certain health care payers," Bob Roche, of Cephalon's Worldwide Pharmaceutical Operations, said in an August 4,
2009 Earnings Call, posted by "Seeking Alpha."
Sampling programs included regular distribution of samples to doctors and a free 7-day coupon for patients to print out
from an online website.
Cephalon also implemented a "Co-Pay Assistance Program," which provides up to $50 of co-pay assistance per prescription.
"To make things easier for patients, this program is administered automatically in many pharmacies, making co-pay
assistance coupons or cards unnecessary," Roche said.
However, patients covered by government plans like Medicare and Medicaid do not qualify for the co-pay assistance, CEO,
Frank Baldino, pointed out in the call.
Cephalon also developed a data base of approximately 50,000 individuals who requested information on Nuvigil and mailed
"these people a launch kit, with a free seven-day coupon and information on our Co-Pay Assistance Program," he said.
The company also planned to implement an online, "Wake Information Support and Education Program," as part of a
professional education and support campaign designed for doctors in the sleep/wake field, Roche reported. "In addition
to information on sleep and wakefulness issues, physicians can, with just a click of a mouse get information on NUVIGIL,
order samples, request coupons, ask questions, or request to see a sales representative," he explained.
In the first quarter of 2010, Cephalon also launched a Nuvigil shift work disorder campaign. There are "15 million shift
workers in the United States and approximately 1/3 of them suffer from excessive sleepiness associated with shift work
disorder," Baldino reported in a May 4, 2010 Earnings Call.
A non-branded radio campaign was launched "in select markets where shift work is a significant part of the working
population," said Robert Repella in the call. We "expect to see the benefits coming out of that as we move through the
year.”
Cephalon also started a program with WebMD in the first quarter, he said. We've had "over 7 million visits to their
website related to either NUVIGIL or disease area content.”
Today it's doubtful that shift workers in the US make enough money to pay for Provigil or Nuvigil. In August 2010, one
hundred 250mg tablets of Nuvigil cost $1,080, or $10.80 per tablet, and the price for 100 tablets of 200mg of Provigil
was $1,855, or $18.55 per pill, at DrugStore.com.
If generic Provigil was to hit the market, patients who converted to Nuvigil would likely be pressured by payers to
switch back to a cheaper Provigil generic. In the meantime, the same drug, sold as Modalert, can currently be purchased
online from other countries for as low as $120 per hundred, at EuroDrugstore.
Off-Label Marketing Schemes
Back on November 8, 2007, Ed Silverman’s Pharmalot reported that Cephalon had struck a deal with the US Attorney in
Philadelphia to pay $425 million to settle off-label marketing charges. He noted that the settlement was no surprise
because the firm had been under a microscope for off-label marketing for some time and had received an FDA warning
letter in February 2007, ordering an end to promotional materials claiming Provigil could be used to treat fatigue.
The underlying lawsuits were filed in 2003, by three former employees, Bruce Boise, Michael Makalusky, and Lucia
Paccione, and another whistleblower, Joseph Piacentile, in federal court in the Eastern District of Pennsylvania, under
the False Claims Act, arising from false claims submitted to Medicaid, Medicare and other federal insurance programs
that do not provide coverage for such off-label uses.
About six months after the settlement became known, on April 30, 2008, Cephalon announced the hiring of Gerald Pappert,
former Attorney General of Pennsylvania, as Executive Vice President and General Counsel. Pappert was First Deputy
Attorney General from 1997 to 2003 and Attorney General from 2003 to 2005.
When he took over as attorney general, Pappert "launched a vigorous fight to lower the cost of prescription drugs for
Pennsylvanians," the AG’s website states.
"I will ensure that prescription drugs are priced fairly, and I will take action against those who defraud our
Commonwealth programs or cheat us through illegal pricing and other schemes," he promised, after being sworn into office
in February 2004.
The same month, Pappert was appointed to the Pharmaceutical Pricing and Prescription Drug Abuse task forces, of the
National Association of Attorneys General, "which were formed to ensure that pharmaceuticals are priced fairly and to
prevent the illegal use and sale of prescription drugs, respectively," according to February 4, 2004 press release.
In May 2004, Pappert reported that Cephalon's Actiq, a narcotic lollipop, was showing up in illegal sales in
Philadelphia under the street nickname "perc-o-pops," according to the September 30, 2008 Philadelphia Inquirer.
In September 2004, the US attorney in Philadelphia subpoenaed documents about Cephalon's sales and marketing of Actiq,
Provigil, and Gabitril, an epilepsy drug, the Inquirer reported
During his tenure in Harrisburg, Pappert filed a lawsuit accusing 13 drug companies of price-fixing in March 2004. "As
Attorney General, I am committed to doing everything I can to reduce the price of prescription drugs for the
Commonwealth and its citizens," he said, in a March 10, press release on the suit.
He explained that many consumers purchase drugs, either by themselves or through a health plan or insurer, and "are
financially harmed when drug companies intentionally raise the prices of their drugs to manipulate the market.”
In part, the lawsuit accused the companies of "the widespread practice of offering trips, consulting opportunities,
seminars, gifts, meals and cash payments to medical providers in return for prescribing their products," the press
release noted.
"Several of the companies named in my lawsuit," Pappert wrote in a March 19, 2004, Oped, "have already pled guilty to
and/or agreed to settle federal charges of having engaged in unlawful marketing and sales practices with respect to
certain of their prescription drugs."
"These companies have already paid more than $1 billion in fines and civil penalties to the federal government," he
pointed out.
"My pharmaceutical industry lawsuit focuses on the pricing practices, which I believe are clearly illegal," he told
Insider. "If we ultimately succeed, it is going to change the way the industry prices pharmaceuticals, and stop the
prices from continuing to skyrocket, and reduce prices."
About five months after Pappert went to work for Cephalon, on September 29, 2008, the US Department of Justice announced
that the firm would enter a criminal plea to one count of "Distribution of Misbranded Drugs," and pay $425 million to
settle federal and state charges and resolve allegations that it marketed three drugs, Provigil, Actiq and Gabitril, for
unapproved uses.
Pappert signed off on the agreement as Executive VP and General Counsel of Cephalon.
The government's investigation began in January 2003, when Bruce Boise, a sales representative in Ohio, contacted the
FDA about Cephalon's sales practices. Boise agreed to wear a wire to a company sales conference to help the government
gather evidence, according to his attorney, Peter Chatfield, in a September 29, 2008 press release by his firm, Phillips & Cohen. In November 2003, another sales rep, Lucia Paccione of Philadelphia, filed the first lawsuit. The complaints
remained sealed until the settlement was announced.
"What makes this case unique is that it's the first time, in the absence of substantial kickbacks, that the federal
government has used the False Claims Act to go after a pharmaceutical company for marketing drugs for off-label
indications for which there were no credible published scientific research supporting these drugs' safety or
effectiveness," Chatfield said. "Not only were these uses marketed by Cephalon not approved by the FDA, there was
absolutely no literature published in any medical compendia that supported them."
While federally funded healthcare programs "often will pay for off-label use of drugs supported by credible medical
research and prescribed based on the medical judgment of physicians, Cephalon's marketing efforts pushed well beyond
those constraints," according to the press release.
From 2001 through 2006, "Cephalon improperly promoted Provigil to treat sleepiness, tiredness, decreased activity, lack
of energy and fatigue," the DOJ sentencing memorandum reports.
"Cephalon continued its illegal promotional activities after January 2002, when the FDA specifically directed the
company to stop promoting Provigil for off-label uses," it states. For instance, in November 2002, a Cephalon manager
accompanying a sales representative on calls to physicians, told the sales person: "Your best call of the day was with
Dr. [a psychiatrist] ... Informing the physician of the transition that we have made with Provigil from narcolepsy to
the variety of areas in which it is currently being used was also effective."
"Cephalon had its sales representatives call on doctors who would not normally prescribe the defendant’s drugs in the
course of the doctors’ practice," DOJ states. In fact, during a February 15, 2007 program, ABC's "20/20," revealed a
copy of a sales report that showed allergists, internists, pediatricians and even dentists were prescribing Provigil
off-label to people with depression, MS, hyperactivity and cancer.
Celaphon marketed directly to psychiatrists after concluding that they respond to a "lower threshold of scientific
proof" than other doctors. "In other words, Cephalon targeted physicians that would least object to their promoting
Provigil for uses with little clinical support," says a September 29, 2008 press release by Connecticut's attorney
general.
In December 2002, Cephalon sought to expand Provigil’s label to cover excessive sleepiness, without regard to the
patient’s underlying medical condition. However, in January 2004, the FDA approved only a narrow expansion for excessive
sleepiness associated with obstructive sleep apnea and shift work sleep disorder.
Harvard professor, Dr Charles Czeisler, chief of sleep medicine at Brigham and Women's Hospital, was lead investigator
in the shift-worker study, which showed Provigil kept participants awake 1.7 minutes longer than a placebo. In September
2003, Czeisler went before the FDA to lobby for approval to treat shift-workers on behalf of Cephalon.
The FDA formally approved it for shift work disorder on January 23, 2004. Less than four months later, on May 21, 2004,
Science Magazine reported that Cephalon was providing $2.75 million to fund an endowed chair at Harvard Medical School
to be named after Cephalon's founder and CEO, Frank Baldino, and that Czeisler would hold the chair. Baldino was also on
the advisory board of Harvard, Science noted.
Czeisler published a paper in the August 2005, "New England Journal of Medicine," and claimed night-shift workers
remained more alert with Provigil. "I would characterize [Provigil] as the treatment of choice with patients with
shift-work disorder," he said.
However, in an editorial in the same issue, Dr Robert Basner, director of Columbia University's Cardiopulmonary Sleep
and Ventilatory Disorders Center, said the researchers' data showed only slight improvements in workers wakefulness and
productivity with Provigil, and the drug seemed to exacerbate insomnia for some patients.
"That's not a very robust endorsement of the drug coming from the investigators themselves," Basner wrote. "This drug is
little better than nothing in terms of making them less sleepy during shift work at night.”
For the February 2007 program, "20/20" wanted to find out how well Provigil worked in studies not funded by Cephalon,
which led them to the sleep labs of the US Army and research psychologist, Nancy Wesensten, who studies drugs to help
soldiers stay awake.
In studying Provigil for the army, Wesensten compared it to caffeine in terms of how well soldiers performed on tests,
how alert they were, and side effects. "In our hands, at the dosages we tested, modafinil did not work any better than
caffeine," she told 20/20.
Cephalon arranged for "case studies to drive growth for off-label uses such as multiple sclerosis, adult ADD and
depression," the DOJ press release charges. And in fact, a literature review, by Dr Jacob Ballon and Dr David Feifel,
for an April 2006 paper in the "Journal of Clinical Psychiatry," was conducted on PubMed, with the search term modafinil
OR Provigil, and shows a total of 397 articles for on and off-label uses.
"Cephalon employed sales representatives and retained medical professionals to speak to doctors about off-label uses,"
the press release said. "The company funded continuing medical education programs, through millions of dollars in
grants, to promote off-label uses of its drugs."
"Cephalon sent doctors to “consultant” meetings at lavish resorts to hear the company’s off-label message," the DOJ
reports. According to a Cephalon document, these meetings "proved incredibly effective in driving prescription growth
among the attendees," the memo notes.
"Cephalon trained its sales representatives on techniques to prompt the doctors into off-label conversations," and "had
its sales representatives tell doctors how to document their off-label uses of drugs to get these uses paid by insurers,
who often will not pay for off-label uses," the DOJ reports.
The drug maker "also structured its sales quota and bonuses in such a way that sales representatives could only reach
their sales goals if they promoted and sold the drugs for off-label uses," the press release notes.
According to the sentencing memo, for over six years, the very top levels of the company knew and approved of these
efforts.
Cephalon’s sales reports show the success of the off-label campaigns, with Provigil sales rising from $146 million in
2001, to $691 million in 2006, to more than $850 million in 2007. Sales increased more than a 1,000% from 2000 to 2007,
according to Connecticut's attorney general and the government found more than 80% were for off-label use.
It's difficult to see where the off-label marketing has ended because Provigil profits have never fallen. SEC filings
show sales of the drug exceeded $988 million in 2008, the year the settlement agreement was signed, roughly $138 million
more than 2007.
In 2009, Provigil sales topped the billion dollar mark, and Nuvigil earned $73,391 million. Combined, these two products
had an 11% increase in sales over 2008, and made up 51% of Cephalon's total net sales for 2009.
With a doubling of Provigil sales in the first 6 months of 2010, totaling $547,281 million, sales could potentially beat
the record set in 2009. In comparison, sales in first 6 months of 2009 were only $515,430 million. Nuvigil had sales of,
$75,890 million in the first 6 months of 2010, compared to $16,786 million in the first 6 months of 2009.
Since the launch of Nuvigil on June 1, 2009, Cephalon has been aiming at approvals for additional indications, including
people with jet lag and traumatic brain injury, as well as adjunctive therapy for schizophrenia and bipolar disorder,
and fatigue associated with cancer treatment. "We expect NUVIGIL to be a much bigger drug than PROVIGIL ever was in a
long run," CEO, Baldino, said in a February 11, 2010 Earnings Call.
However, in March 2010, the FDA nixed approval for jet lag, which Cephalon was counting on because it would have allowed
sales reps to hit virtually every kind of physician that might treat jet lag, instead of only doctors who treat sleep
disorders, according to market analysts.
In the last week of June, Cephalon filed a formal response to the FDA's non-approval. The FDA “classified the response
as a class two resubmission requiring a six-month review with a PDUFA date of December 30,” Baldino said in a July 27,
Earnings Call.
Also, in June 2010, the results for a study of Nuvigil, in conjunction with antipsychotics, for schizophrenia showed the
drug failed to meet its primary endpoint, and in the July 27, Earnings Call, Dr Lesley Russell, Cephalon's Chief Medical
Officer, said the company had “decided not to move forward with cancer related to fatigue for NUVIGIL.”
Hammered Again in Court
On the same day that the FDA refused approval of Nuvigil for jet lag, a federal judge refused to dismiss the antitrust
lawsuits filed against Cephalon by the Federal Trade Commission and others.
In 2005 and 2006, Cephalon entered into settlements with the generic drug makers, Barr, Mylan, Teva, and Ranbaxy, and
agreed to pay the four companies a combined total of more than $200 million, in return for agreements that would keep
generic versions of Provigil from coming on the market until April 2012, instead of 2008.
In March 2006, when announcing the settlements, CEO Baldino told the Philadelphia Business Journal: "We were able to get
six more years of patent protection. That's $4 billion in sales that no one expected."
Later in 2006, a class of direct purchasers (such as health plans and pharmacies) filed a lawsuit against Cephalon and
the generic companies, followed soon after by a class of end-payers of Provigil, and Apotex, another generic firm. They
all alleged that Cephalon, and the generic makers were engaged in anticompetitive conduct in violation of the Sherman
Antitrust Act.
Pay-For-Delay Deals
The so-called "pay-for-delay" agreements (also known as "reverse payments") are settlements of patent litigation in
which a brand-name company pays a potential generic competitor to abandon a patent challenge and delay entering the
market with a generic.
Brand-name companies "can delay generic competition that lowers prices by agreeing to pay a generic competitor to hold
its competing product off the market for a certain period of time," the FTC explained in a January 2010 report titled,
"Pay-for-Delay: How Drug Company Pay-Offs Cost Consumers Billions," which summarized the savings lost to US consumers
through such deals during the previous six years.
The FTC found the number of pay-for-delay agreements had increased from none in 2004, to a record 19 in the fiscal year
of 2009. On average, these agreements precluded generic entry for 48 months, the agency reports.
Most of the deals reached since 2005 were still in effect, and were protecting at least $20 billion in brand-name sales
from generic competition. "These sweetheart deals are being done on the backs of consumers," FTC chairman, Jon
Leibowitz, told the New York Times in January 2010. "From the perspective of the Federal Trade Commission, these deals
are one of the worst abuses across the board in health care and should be stopped.”
The FTC estimates the agreements currently cost American consumers $3.5 billion a year in higher prescription costs when
they miss out on generic prices that can be as much as "90 percent less than brand prices," according to the study.
"Based on a preliminary analysis, already, in the first nine months of FY 2010, there have been more brand-generic
settlements involving some sort of compensation - 21 - than in any prior full fiscal year," Leibowitz reported in July
27, 2010 testimony before the House Judiciary Subcommittee on Courts and Competition Policy.
Those settlements protect $9 billion in drug sales from generic competition. "That’s almost an epidemic," he told
lawmakers, "and left untreated, these types of settlements will continue to insulate more and more drugs from
competition."
The FTC joined the Cephalon antitrust litigation on February 13, 2008, by filing a lawsuit against Cephalon, but not the
generics makers, alleging violations of the Federal Trade Commission Act. Cephalon’s anticompetitive scheme "denies
patients access to lower-cost, generic versions of Provigil and forces consumers and other purchasers to pay hundreds of
millions of dollars a year more for Provigil," the agency stated in a press release the same day.
On March 29, 2010, a federal judge in Philadelphia denied a defense motion to dismiss the FTC’s case (and related cases)
against Cephalon. The case is now in the discovery phase, according to the FTC. However, nobody better look for a
resolution and cheap generic Provigil anytime soon because Cephalon has every intention of dragging out this litigation
as long as possible and is geared up for round two of delay and motion filing.
In a May 4, 2010 Earnings Call, George Pappert, the former champion of lower drug prices for citizens of Pennsylvania,
informed listeners that the discovery process "will take us to roughly the middle of 2011."
"And then we will be filing our dispositive motions, our motions for summary judgment," he said. "I believe the court
has a schedule set for July of 2011, and then the court will consider those motions at that time."
Being the first batch of motions took years to resolve, generic Provigil will likely enter the market in 2012, exactly
as specified in the pay-for-delay deals, and long before the litigation ends. Providing the drug is still allowed to be
sold at all that is.
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Evelyn Pringle
(Evelyn Pringle is an investigative journalist focused on exposing corruption in government and corporate America)