by Ben Vernia | December 16th, 2010
The Department of Justice announced on December 15 that Elan Corp., PLC, its American subsidiary, and the Japanese firm Eisai, Inc., have agreed to pay a combined $214.5 million to resolve claims that the companies promoted the anti-epilepsy drug Zonegran for off-label uses. According to DOJ’s press release:
Irish pharmaceutical manufacturer Elan Corporation PLC and its U.S. subsidiary Elan Pharmaceuticals Inc. (EPI) have agreed to pay more than $203 million to resolve criminal and civil liability arising from the illegal promotion of the epilepsy drug Zonegran, the Justice Department announced today. In a separate civil settlement, Japanese drug marketer Eisai Inc., which purchased the drug from Elan, will pay $11 million to resolve civil liability for off-label marketing of Zonegran.
According to the agreement, Elan has agreed to plead guilty to an information charging it with misdemeanor misbranding of Zonegran, in violation of the Food, Drug and Cosmetic Act. Zonegran was approved by the Food and Drug Administration (FDA) as an anti-epileptic drug, for the treatment of partial epileptic seizures in adults over the age of 16, and was not approved for any other uses. Elan promoted the sale of Zonegran for a wide variety of improper off-label uses including mood stabilization for mania and bipolar disorder, migraine headaches, chronic daily headaches, eating disorders, obesity/weight loss and seizures in children under the age of 16. Elan’s off-label marketing efforts targeted non-epilepsy prescribers and the company paid illegal kickbacks to physicians in an effort to persuade them to prescribe Zonegran for these off-label uses. Under the terms of the plea agreement, Elan has agreed to pay a criminal fine of $97,050,266 and plead to a misdemeanor violation of the Food Drug and Cosmetic Act. EPI will also forfeit $3.6 million in assets.
In addition, Elan has agreed to pay $102,890,517 to resolve civil allegations under the False Claims Act and related state statutes that the company illegally promoted Zonegran and caused false claims to be submitted to government health care programs for a variety of uses that were not medically accepted indications and therefore not covered by those programs. The federal share of the civil settlement is $59,491,477, and the state Medicaid share of the civil settlement is $43,399,040.
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Under the settlement with Eisai, that company will pay $11 million to resolve civil allegations under the False Claims Act and related state statutes that the company illegally promoted Zonegran and caused false claims to be submitted to government health care programs for uses that were not medically accepted indications and therefore not covered by those programs. The federal share of the civil settlement is $6,341,751 and the state Medicaid share of the civil settlement is $4,658,249. Eisai purchased the drug and its sales force from Elan in April 2004. While Eisai retrained the sales force and took some steps to stop illegal marketing of the drug, some off-label marketing continued and Eisai benefitted from the previous off-label marketing by Elan.
The case arose from a qui tam suit brought by a physician. The whistleblower will receive approximately $11 million (approximately a 16.4% relator’s share of the federal civil recoveries).
In addition to the payments and guilty plea, Elan has agreed to enter into a Corporate Integrity Agreement with OIG-HHS.
