Elan Corporation PLC and its US subsidiary Elan Pharmaceuticals Inc. have agreed pay more than $203 million to resolve criminal and civil liability arising from the illegal promotion of the epilepsy drug <"http://www.yourlawyer.com/topics/overview/epilepsy_drugs">Zonegran, the US 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.
The civil settlement resolves a whistleblower lawsuit filed under the federal False Claims Act. The whistleblower provisions of the False Claims Act allow private citizens with knowledge of fraud to bring civil actions on behalf of the United States and share in any recovery. The whistleblower in this case, Dr. Lee Chartock, a Massachusetts physician, will receive payments totaling more than $10 million from the federal share of the Elan civil recovery and $1 million from the federal share of the Eisai civil recovery, the Justice Department said.
According to a Justice Department statement, Zonegran was approved by the Food & 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. The government says 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. Elanâ€™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, according to the Justice Department.
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, the government says some off-label marketing continued and Eisai benefitted from the previous off-label marketing by Elan.
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.
Elan has also agreed to enter into a corporate integrity agreement with the Office of Inspector General of the Department of Health and Human Services (OIG-HHS). That agreement requires Elan to institute procedures and reviews designed to avoid and promptly detect problematic conduct in the future. It also requires Elan to submit regular reports to OIG-HHS.
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.
“Off-label promotion of pharmaceutical products undermines the FDAâ€™s important role in protecting the American public by determining whether a drug is safe and effective for a particular use before it is marketed,” Tony West, Assistant Attorney General for the Civil Division, said in the Justice Department statement. “Such illegal conduct by pharmaceutical companies also costs the government billions of dollars, and these civil settlements and the criminal plea agreement by Elan demonstrate that such conduct will not be tolerated.”