Business World

Monday 19 February 2018

Elan pays out $203m for asking doctors to wrongly prescribe drug

Thomas Molloy

IRELAND'S largest pharmaceuticals company paid illegal kickbacks to doctors to persuade them to prescribe an epilepsy treatment to children and for the wrong purposes, the US Justice Department has said.

Elan, which is based in Dublin and has a large factory in Athlone, promoted the sale of Zonegran for various off-label uses, including mood stabilisation for mania and bipolar disorder, migraine and chronic daily headaches, eating disorders, obesity and weight loss and seizures in children under the age of 16, the department said.

Elan will now pay more than $203m (€154m) after a unit trained its sales staff to promote Zonegran for children by putting a capsule's contents into apple sauce.

Doctors with the potential to write many prescriptions were invited on expense-paid trips to Bermuda, Florida and Arizona, to hear speeches on off-label uses, according to the charge. Sales "increased dramatically", rising 80pc from August 2001 to August 2002, while 2003 revenue increased 87pc over the previous year, prosecutors said.

The Irish company in 2004 sold Zonegran to Japanese drug marketer Eisai for $128.5m which will pay $11m to resolve its civil liability for off-label marketing of the adult epilepsy treatment.

Elan will pay $102.9m to resolve civil claims and $100m in criminal fines and forfeitures. Elan set aside a $206.3m in the second quarter to cover the related costs. The company said no additional charge to the company's earnings would be recorded for the settlement.

Elan entered into a corporate-integrity agreement with the inspector general of the Health and Human Services Department.

The Irish company also settled a whistleblower lawsuit filed in 2004 under the False Claims Act by Dr Lee Chartock. The law allows private citizens to sue on behalf of the government and share in any recovery.

Zonegran, first sold in May 2000, was the last of seven anti-epilepsy drugs to enter the market, according to the misdemeanor criminal charge against Elan pharmaceutical, or EPI. In its first year, Zonegran had only 1pc of the market, according to prosecutors.

In 2002, EPI "came under significant financial pressure" because of an investigation of its financial practices by the US Securities and Exchange Commission that caused shares to drop to $2 from $65 in six months, according to the criminal charge.

In evaluating its options, EPI "decided to retain Zonegran because of its large potential for growth, particularly in unapproved areas", prosecutors said.

Elan vice president John Moriarty said the company was pleased with the result. "We are pleased to have reached this agreement, which concludes a long-standing legal matter on a product Elan divested over six years ago," said Elan vice president. "Elan is committed to adhering to the highest ethical and legal standards."

Irish Independent

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