Cephalon says Travelers lacks authority to bring Actiq suit

* Cephalon says only FDA has oversight of off-label uses

* Insurer says paid for thousands of off-label prescriptions

July 13 (Reuters) - The drugmaker Cephalon Inc has sued Travelers Cos to stop the insurer from trying to recover millions of dollars it allegedly paid for off-label uses of Actiq, a prescription medication to treat pain in cancer patients.

Cephalon, a unit of Israel's Teva Pharmaceutical Industries Ltd, said Travelers has demanded that it reimburse $17.4 million stemming from the off-label promotion of the drug. Such promotions involve uses of a drug not approved by regulators.

While Cephalon settled with U.S. federal and state regulators in 2008 over similar allegations, it said federal law entrusts the U.S. Food and Drug Administration with oversight of off-label promotion and does not give Travelers the right to bring its own case.

Cephalon said Travelers threatened to sue if its demands were not addressed by July 13, prompting Cephalon to ask the federal court in Manhattan to declare that it owes nothing.

Travelers officials could not immediately be reached for comment.

In a letter attached to Cephalon's complaint, a Travelers lawyer claimed the insurer has covered more than 8,400 Actiq prescriptions for more than 480 non-cancer patients with maladies including back strain, bone fractures, burns, concussions, contusions, dislocations, hernias and slipped discs.

Cephalon, based in Frazer, Pennsylvania, is best known for its Nuvigil drug to improve wakefulness.

Actiq is the drug Fentanyl, taken by lollipop, and used to manage pain in cancer patients receiving and tolerant to around-the-clock opioid therapy.

Lawyers in other cases have alleged that oncologists order only a small percentage of Actiq prescriptions.

The case is Cephalon Inc v Travelers Cos, U.S. District Court, Southern District of New York, No. 11-05395.