Elan expects Zonegran marketing probe to cost it $206m
pharmafile | July 19, 2010 | News story | Sales and Marketing | Elan, Zonegran
Elan Corporation expects to pay $206.3 million to settle a US government investigation into the way it marketed its anti-epileptic drug Zonegran.
The Dublin-based manufacturer, which has since sold the brand to Eisai, is being probed on its possible failure to comply with kickback and false claims laws in the US.
The company has reached an agreement in principle with the US Attorney’s Office for the District of Massachusetts, following the US Department of Justice’s investigation into sales and marketing practices.
The money would cover all US federal and related state Medicaid claims, and their related costs – but as an ominous aside the company warns that it may not be out of the woods yet, since there could be more legal action by other parts of the US government or private individuals.
Elan has heavily trailed the possibility of big payouts since it received a subpoena in January 2006 from the Departments of Justice and Health and Human Services, asking for documents and materials.
“The resolution of this Zonegran matter could require Elan to pay substantial fines and to take other actions that could have a material adverse effect on Elan,” it has stated.
As part of the settlement so far agreed, it is also anticipated that Elan’s US subsidiary Elan Pharmaceuticals will plead guilty to a misdemeanor violation of the US Federal Food, Drug and Cosmetic Act.
The company would then enter into a corporate integrity agreement with the Office of Inspector General of the US Department of Health and Human Services.
The company points out that it does not know when – or indeed if – this arrangement will be finalised, and warns that the final settlement may be different anyway.
Zonegran (zonisamide) was developed by Dainippon Pharmaceutical and was divested to Eisai in 2004.
Adam Hill
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