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Drug company pleads guilty in illegal marketing case

In a suit that grew out of a whistleblower complaint, Orphan Medical Inc. pleaded guilty in federal court to charges that it illegally promoted Xyrem, commonly known as a “date rape” drug.

Orphan, a subsidiary of Jazz Pharmaceuticals, promoted the drug to doctors for a wide range of illnesses it was not approved to treat. Xyrem had been approved to treat symptoms of narcolepsy, but Orphan admitted in its plea that it promoted the drug to physicians for off-label uses, including fatigue, insomnia, chronic pain, weight loss, depression, bipolar disorders and movement disorders such as Parkinson’s disease.

A former Orphan sales representative, Shelley Lauterbach, filed a whistleblower lawsuit in 2005 that reported the company’s behavior, according to her lawyers, the firm of Phillips & Cohen.

Orphan will pay $12.2 million in criminal restitution to public and private health insurers, as well as a criminal fine of $5 million, and $3.75 million to resolve civil charges.

An Associated Press story on the settlement ran in the July 14, 2007 issue of Newsday.

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