BOSTON - (Mealey's) Drug maker Elan Corp. PLC on Dec. 15 pleaded guilty to misdemeanor branding for the off-label marketing of the epilepsy drug Zonegran and will pay more than $203.5 million in criminal and civil penalties (United States of America v. Elan Pharmaceuticals, Inc., No. 10-10431, and United States of America, ex rel. Lee Chartock, M.D., et al. v. Elan Corporation, PLC, et al., No. 04-11594, D. Mass.).
In addition, Eisai Inc. agreed to pay $11 million to settle False Claims Act allegations for the off-label promotion of Zonegran, which it had purchased from Elan.
A 2004 False Claims Act lawsuit, filed in the U.S. District Court for the District of Massachusetts, alleged that the off-label marketing caused the submission of false claims to Medicare and Medicaid. The government intervened and on Dec. 15 filed a criminal case in the same court against Elan for misbranding Zonegran.
Zonegran was approved only as an adjunct treatment for partial seizures in epileptic patients over age of 16. The whistle-blowers and the government allege that Elan promoted the drug for off-label used such as psychiatric disorders, migraine headaches, chronic daily headaches, eating disorders, weight loss, movement disorders such as Parkinson's disease, monotherapy in epileptics and use in children under 16.
The government and the relators alleged that Elan paid kickbacks to doctors to get them to prescribe Zonegran.
Elan will pay a criminal fine of $97,050,266 and forfeit $3.6 million in assets. It will pay $102.8 million to resolve False Claims Act violations. The federal government's share is $59,491,477, and the state Medicaid share is $43,399,040.
The whistle-blowers will be paid more than $10 million, which will be deducted from the federal government's recovery.
Elan also agreed to enter into a corporate integrity agreement with the Office of Inspector General for the U.S. Department of Health and Human Services.
The U.S. attorney for the District of Massachusetts said Eisai agreed to pay $11 million to resolve False Claims Act violations stemming from continued off-label marketing of Zonegran after it bought the drug from Elan. The federal government will take $6,341,751 of that amount, and $4,658,249 will go for state Medicaid programs.
The allegations against Eisai were part of the False Claims Act lawsuit, and the relators will be paid more than $1 million from the federal share.
[Editor's Note: Full coverage will be in the Jan. 6 issue of Mealey's Emerging Drugs & Devices. In the meantime, the documents are available at www.mealeysonline.com or by calling the Customer Support Department at 1-800-833-9844. Elan criminal information. Document #28-110106-001F. Elan criminal plea agreement. Document #28-110106-002P. Elan civil settlement. Document #28-110106-003P. Eisai civil settlement. Document #28-110106-004P. For all of your legal news needs, please visit www.lexisnexis.com/mealeys.]
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