Elan Agrees to Pay $203.5M in Off-Label Marketing Case

| About: Elan Corporation, (ELN)

In the latest instance in which a drugmaker has been tagged for off-label marketing, Elan and its US subsidiary agreed to pay $203.5 million to resolve criminal and civil charges in connection with illegally promoting its Zonegran epilepsy med. And in a separate settlement, Eisai, which purchased the med from Elan, has paid $11 million to resolve civil charges of off-label marketing (see this).

The settlement is not a huge surprise given that Elan signaled a deal was in the works last summer. But the scope of the off-label marketing is impressive. Keep in mind that Zonegran was approved to treat partial seizures in epilepsy for adults over the age of 16 - and nothing else. But the feds say Elan promoted the med to treat mood stabilization for mania and bipolar disorder; migraine headaches; chronic daily headaches; eating disorders; obesity; Parkinson’s disease; and for a variety of seizures in children under the age of 16. Elan also paid illegal kickbacks to docs.

These shenanigans helped the bottom line. According to the whistleblower lawsuit filed by Lee Chartock, a Massachusetts psychiatrist who became a Zonegran prescriber, sales in 2001 were $37.8 million but reached $113 million in the 12-month period ended March 31, 2006, even though the drug lost its patent protection in December 2005 and was subject to competition from generics. The “increase was due in large part to the illegal incentives provided to physicians in order to induce prescriptions of Zonegran as well as ELAN’s unlawful marketing activities,” the suit states.

Among the episodes he recounted: he was paid by Elan to attend a Florida conference, as an adviser, where off-label use for mood stabilization and the treatment of mania was endorsed by a specialist from the University of Pennsylvania, who discussed a six-month older poster. The specialist conceded that “controlled trials are warranted to further investigate the use…in bipolar disorder,” but maintained the drug “may be an effective and well-tolerated adjunctive treatment for refractory bipolar patients.” This was based on 12 patients, five of whom reported adverse events. There was also talk of using the med for binge eating and bulimia nervosa based on data for just a few patients.

Under the deal, Elan agreed to pay a $97 million criminal fine and nearly $103 million to resolve the civil charges that were filed by a whistleblower under the False Claims Act (here is the civil settlement, this is the plea agreement and this is the Elan statement). For his trouble, Chartock is getting $11 million.

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