Q&A Regarding Our Relationship with Healthcare Professionals

Healthcare professionals play a vital role in helping Cephalon develop and bring medicines to market that address patients’ unmet medical needs. It is our aim to shed light on the true nature and benefit of these relationships and to reinforce our company’s commitment to conduct our business responsibly and with integrity.

Therefore, to further better understanding of our relationships with healthcare professionals, we have included answers to likely questions you may have below.

1. Why has Cephalon agreed to publish information on its website regarding the financial relationships with healthcare professionals who advise or consult with Cephalon?
2. Are fees paid to healthcare professionals by pharmaceutical companies like Cephalon contributing to the rising cost of healthcare?
3. How does Cephalon select the healthcare professionals who perform services on its behalf?
4. What types of expenditures to healthcare professionals does Cephalon disclose?
5. Why do Cephalon and other pharmaceutical companies provide meals to healthcare professionals?
6. Does Cephalon permit “gifts” to be given to healthcare professionals?
7. Is there any relationship between the services healthcare professionals provide Cephalon and their prescribing activity related to Cephalon products.
8. Does Cephalon cap the annual amount of fees that may be paid to an individual healthcare professional?
9. How does Cephalon determine how much to pay healthcare professionals for their services?
10. How often will Cephalon update information posted to its website regarding payments made to healthcare professionals?
11. Should I be concerned if my healthcare professional is listed on the Cephalon website?
12. What is the difference between the Expenditures to Healthcare Professionals database and the 2010/2009 Fees for Services databases?

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1. Why has Cephalon agreed to publish information on its website regarding the financial relationships with healthcare professionals who advise or consult with Cephalon?

Cephalon supports transparency in its financial relationships with healthcare professionals. We believe it is important for the public to understand that our partnerships with healthcare professionals allow us to develop and bring new medicines to market, address the needs of patients, and assure the safe and appropriate use of our medications.

On September 28, 2008, Cephalon entered into a Corporate Integrity Agreement (CIA) with the Office of the Inspector General of the U.S. Department of Health and Human Services. As part of this agreement, Cephalon agreed to post on its Web site all payments to, and spending on, prescribers of our medications. Cephalon's CIA disclosure requirements are similar to those currently in place in several states, as well as those contained in the Physician Payments Sunshine Act that impact the entire pharmaceutical industry.

2. Are fees paid to healthcare professionals by pharmaceutical companies like Cephalon contributing to the rising cost of healthcare?

No. Government agencies and independent experts alike have concluded that there is no direct relationship between pharmaceutical marketing, including those services for which pharmaceuticals pay healthcare professionals, and drug prices or overall healthcare spending.

According to the Centers for Medicare & Medicaid Services, for more than a decade, prescription medicines have accounted for only 10 cents of every healthcare dollar spent. These medicines have increased survival rates for cancer and other diseases and have improved the management of chronic medical conditions such as diabetes and high blood pressure.

3. How does Cephalon select the healthcare professionals who perform services on its behalf?

Cephalon invites healthcare professionals to provide services on our behalf primarily based on their expertise within the therapeutic areas related to our products. We do not grant preference to healthcare professionals based on prescribing activity, nor do we place any expectations on future use of our products.

Once a healthcare professional has been selected to perform services on behalf of Cephalon, we check for federal debarments, and confirm state medical licensure and Drug Enforcement Agency (DEA) licensure, when applicable.

4. What types of expenditures to healthcare professionals does Cephalon disclose?

Beginning in January 2010, Cephalon disclosed total 2009 fees for services paid to each individual healthcare professional contracted to conduct Company-sponsored peer-to-peer educational speaker programs or provide advisory or consulting services. Throughout 2010 via quarterly reports, Cephalon disclosed these same types of payments that occurred during 2010.

In March 2011, Cephalon began disclosing not only payments related to speaker programs and advisory or consulting services the occurred in 2010, but also travel-related expenses associated with services provided and payments made to healthcare professionals for conducting clinical research. Where applicable and identifiable, payments directed to an institution, hospital, or organization for services performed by an individual healthcare professional are disclosed. In addition, Cephalon is disclosing educational meals and educational items that are greater than or equal to $10, and/or where the aggregate amount paid to an individual healthcare professional is greater than $100 in a calendar year.

5. Why do Cephalon and other pharmaceutical companies provide meals to healthcare professionals?

In light of the fact that healthcare professionals often have hectic schedules that require them to balance patient care and other responsibilities, our representatives present scientific or educational information during meal times. On such occasions, we permit our representatives to provide a modest meal to physicians and staff who attend the presentations, as long as it is deemed conducive to the exchange of information, and does not present any entertainment or recreational benefits to healthcare professionals.

Meals are also provided in conjunction with Company-sponsored peer-to-peer educational speaker programs in which a contracted healthcare professional provides medical or scientific information to a group of other healthcare professionals on behalf of Cephalon.

Cephalon strictly adheres to the guidelines developed by the Pharmaceutical Research and Manufacturers of America (PhRMA) that call for ethical interactions with healthcare professionals, also known as the PhRMA Code. All meals provided by Cephalon to healthcare professionals are in accordance with the PhRMA Code.

6. Does Cephalon permit “gifts” to be given to healthcare professionals?

Yes, but only if those gifts are educational in nature and enhance patient care or advance health education. Therefore, any items provided in the course of these interactions must be designed primarily for the education of patients or healthcare professionals, such as an anatomical model for use in an examination room. Such educational items are deemed appropriate if they are not of substantial financial value and do not offer value to healthcare professionals outside their professional duties.

In recognition of the possibility that some items may foster misperceptions and distract from the educational intent of interactions with healthcare professionals, Cephalon no longer provides non-educational items, such as pens, notepads or other such items.

7. Is there any relationship between the services healthcare professionals provide Cephalon and their prescribing activity related to Cephalon products?

No. Contracting with healthcare professionals to provide advisory and consulting services to Cephalon is neither intended to influence their prescribing activity in any way nor has it been found to be the most influential factor in prescribing decisions. Based on the latest research, the most common factors affecting prescribing decisions include, the patient’s unique situation, the healthcare professionals’ knowledge, data from a peer reviewed publication or a peer, clinical practice guidelines, knowledge obtained through continuing medical education, patient’s insurance coverage and out of pocket costs. 

8. Does Cephalon cap the annual amount of fees that may be paid to an individual healthcare professional?

In accordance with the PhRMA Code, Cephalon caps the total amount of fees paid to individual healthcare professionals in connection with conducting company-sponsored peer-to-peer educational speaker programs.

9. How does Cephalon determine how much to pay healthcare professionals for their services?

Cephalon has established Fair Market Value guidelines to assure that compensation provided to healthcare professionals is appropriate for the services they provide. These guidelines are used to determine the compensation level of each healthcare professional based upon his or her individual qualifications. Compensation and the scope of services to be provided are clearly defined in a written agreement prior to the provision of services.

Considerations that are factored into the calculation of a healthcare professional’s fair market value for a particular service provided to Cephalon include:

• Specialty and area of expertise. Based on market conditions within the healthcare industry, oncologists are compensated at a higher rate for services they perform than are pediatricians.
• The healthcare professional’s level of expertise. A recognized leader within a medical specialty with deep clinical expertise would garner a higher rate of compensation than a specialist who did not possess a comparable level of achievement or experience.
• The scope of the work required. Chairing an advisory board would require a greater degree of preparation and involvement than merely participating on the board, which would be reflected in the compensation of the healthcare professionals who provide the respective services.

Other factors may be considered depending on the type of activity in which a healthcare professional participates and his or her credentials related to carrying out that activity.

10. How often will Cephalon update information posted to its website regarding payments made to healthcare professionals?

Cephalon will update information related to payments made to healthcare professionals on a quarterly basis.

11. Should I be concerned if my healthcare professional is listed on Cephalon’s website?

No. If your personal physician is listed on our Web site it is because he or she possesses expertise within the therapeutic areas related to Cephalon products and has an interest in educating other healthcare professionals about the appropriate and safe use of our products.

12. What is the difference between the type of information included in the Expenditures to Healthcare Professionals database and the 2010/2009 Fees for Services databases?

The Expenditures to Healthcare Professionals database contains a list of healthcare professionals with whom Cephalon has contracted to conduct Company-sponsored peer-to-peer educational speaker programs, provide advisory or consulting services, or conduct clinical research. The database also contains other types of spending and items of value, including travel-related expenses, educational meals, and educational items.

The 2010/2009 Fees for Services databases contain lists of healthcare professionals with whom Cephalon has contracted to conduct Company-sponsored peer-to-peer educational speaker programs or provide advisory or consulting services.