Attorney General Janet T. Mills Announces Elan to Pay $102 Million, Eisai to Pay $11 Million to Settle Zonegran Marketing Claims

December 16, 2010

For Immediate Release Contact: Kate Simmons (207) 626-8577

Attorney General Janet T. Mills announced today that Maine joined with other states and the federal government to an agreement in principle with Irish pharmaceutical company Elan Corporation (Elan), and their North American subsidiary, Elan Pharmaceuticals, Inc. (EPI) to settle allegations that they improperly marketed its anti-epileptic drug Zonegran for off-label purposes. Elan will pay the states and the federal government a total of $101 million in damages and penalties to compensate Medicaid and various federal healthcare programs. In a related settlement, the federal government and states have separately agreed in principle to recover $11 million from Japanese company Eisai, Inc., who bought the drug from Elan, for continuing to improperly promote Zonegran. Maine will receive a total of $155,786 from the two settlements based on prescriptions paid for by MaineCare.

?Elan and Esai marketed Zonegran to pediatric neurologists when Zonegran had not been approved for use by anyone under age 16,? said Attorney General Mills. ?In times of economic stress, it is even more unacceptable for pharmaceutical corporations to abuse the system and force taxpayers to pick up the tab for pharmaceutical drugs marketed and sold for unapproved uses.?

In 2000, the Food and Drug Administration (FDA) approved Zonegran for treatment of seizures. The government contends that Elan, through EPI, improperly marketed Zonegran for off-label uses not approved by the FDA. State Medicaid and other federally funded health care programs then paid claims for illegal uses of Zonegran.

In addition to promoting Zonegran to pediatric neurologists, the government also contends that Zonegran was promoted illegally for off-label uses including treatment for neuropathic pain, obesity, headaches, and a variety of psychiatric conditions. The settlement also resolves allegations that Elan offered and paid illegal remuneration to health care professionals for promoting and prescribing Zonegran in violation of federal and state anti-kickback statutes. Elan has also agreed to plead guilty to a federal misdemeanor charge under the United States Food, Drug, and Cosmetic Act (FDCA) that it misbranded the drug Zonegran through illegal promotional activities. Elan will pay a criminal fine of $102 million to the federal government.

As a condition of its civil settlement, Elan will enter into a Corporate Integrity Agreement with the United States Department of Health and Human Services, Office of the Inspector General, to insure that the company does not engage in illegal marketing and sales practices in the future.

The settlements are based on a qui tam case that was filed in the United States District Court for the District of Massachusetts by a private individual under state and federal false claims statutes.

A National Association of Medicaid Fraud Control Units team participated in the investigation and conducted the settlement negotiations with Elan and Eisai on behalf of the settling states.