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Elan Corporation and Eisai, Inc. to Settle With Wisconsin to Resolve Marketing Improprieties of Epilepsy Treatment Drug Zonegran


MADISON — Attorney General J.B. Van Hollen announced today that Wisconsin has joined with other states and the federal government in reaching an agreement in principle with Elan Corporation (Elan), a publicly traded company headquartered in Ireland, to settle allegations that Elan, through its North American subsidiary, Elan Pharmaceuticals, Inc. (EPI), improperly marketed its anti-epileptic drug, Zonegran, for off-label purposes.  Wisconsin will receive $586,054.52 from Elan as part of the total state and federal share of $1,292,961.09 attributable to Wisconsin Medicaid.


Van Hollen also announced a separate, related settlement with Easai, Inc. (Easai) for allegedly continuing to improperly promote Zonegran until December of 2005, after it acquired the interests in Zonegran from Elan in 2004.  Wisconsin will receive $106,343.01 from Easai as part of the total state and federal share $239,563.34 attributable to Wisconsin Medicaid.


Elan will pay the states and federal governments a total of $101 million in damages and penalties to compensate Medicaid, a joint funded state and federal program, and various federal healthcare programs for harm suffered as a result of its conduct.  Easai will pay a total of $11 million for its role in the improper promotional activities.


“This represents a substantial recovery and helps protect the integrity of Wisconsin Medicaid,” noted Van Hollen.  “When dealing with taxpayer resources we have to aggressively ensure that we get what we pay for.  By stretching every dollar we can get assistance to the genuinely needy and disabled.”  


Elan developed Zonegran and introduced the drug in 2000 following Food and Drug Administration (FDA) approval of Zonegran to treat seizures.  The government contends that Elan, through EPI, improperly marketed Zonegran for uses not approved by the FDA, thereby causing the submission of false claims to state Medicaid programs and to other federally funded health care programs.  Elan allegedly engaged in promotional activities designed to increase the prescribing of Zonegran by pediatric neurologists even though the drug was not approved for patients under the age of 16. 


The government also contended that Zonegran was promoted for such unapproved uses as treatment for neuropathic pain, obesity, headaches, and a variety of psychiatric conditions.  The settlement with Elan also resolves allegations that it offered and paid illegal remuneration to health care professionals to induce them to promote and prescribe Zonegran in violation of federal and state anti-kickback statutes.  In addition to Elan’s civil settlement, EPI has 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 its improper promotional activities, and to 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, which will closely monitor the company’s future marketing and sales practices.