Irish pharmaceutical giant 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.
In a separate civil settlement, the Justice Department
(DOJ) said Japanese drug 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.
Unapproved uses
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.
The company'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.
Elan pays up
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.
Whistleblower suit
The civil settlement resolves a whistleblower lawsuit filed
by Dr. Lee Chartock, a Massachusetts physician, under the qui tam or
whistleblower provisions of the False Claims Act that is pending in the
District of Massachusetts: United States ex rel. Chartock, et al. v. Elan
Corporation, PLC, et al., Civil Action No. 04-11594-RWZ. The qui tam provisions
allow private citizens with knowledge of fraud to bring civil actions on behalf
of the United States and share in any recovery.
As part of the resolution with Elan, Dr. Chartock will
receive payments totaling more than $10 million from the federal share of the
civil recovery. The civil settlement with Eisai also resolves allegations in
the Chartock action. Dr. Chartock will receive payments totaling more than $1 million
from the federal share of the Eisai civil recovery.
Also as part of the settlement, Elan has 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.
Eisai settlement
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 benefited from the previous off-label
marketing by Elan.
"Off-label promotion of pharmaceutical products undermines
the FDA'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," said Tony West, Assistant Attorney General for the Civil
Division. "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."
The settlement is part of the government's emphasis on combating
health care fraud. One of the most powerful tools in that effort is the False
Claims Act, which the Justice Department has used to recover more than $5
billion since January 2009 in cases involving fraud against federal health care
programs.
The Justice Department's total recoveries in False Claims
Act cases since January 2009 have topped $6 billion.
