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Elan and Eisai settle marketing charges

Elan Corporation will pay over $203m to settle charges that it engaged in illegal off-label promotions for its epilepsy drug Zonegran

Ireland's Elan Corporation and its US subsidiary Elan Pharmaceuticals have entered into a settlement agreement with the US Justice Department under which the company will pay more than $203m to settle charges that it engaged in illegal off-label promotions for its epilepsy drug Zonegran (zonisamide). Eisai, which bought the drug and its sales force from Elan in 2004, will pay $11m to resolve similar charges.

The Justice Department claims that Elan promoted the epilepsy drug for a number of unapproved 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. The government alleges that the company targeted non-epilepsy prescribers with the improper marketing efforts and paid illegal kickbacks to encourage the doctors to prescribe the drug for the off-label uses.

The Justice Department acknowledged that Eisai retrained the sales force and "took some steps to stop illegal marketing" after it acquired the drug. However, "some off-label marketing continued and Eisai benefited from the previous off-label marketing by Elan," the government maintains.

Elan will plead guilty to misdemeanor misbranding of Zonegran and pay a criminal fine of about $97m, as well as about $102m to resolve civil allegations that the illegal promotions caused government health programs like Medicaid to pay for the drug for indications that were not medically accepted. In addition, US-based Elan Pharmaceuticals will forfeit $3.6m in assets.

Elan has also entered into a corporate integrity agreement that was negotiated with the company by the US Department of Health and Human Services.

The whistleblower behind the allegations, a Massachusetts doctor named Dr Lee Chartock, will receive payments of more than $10m from the civil settlement.

16th December 2010

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