Elan Corp. agreed to plead guilty to introducing misbranded drugs into interstate commerce, in violation of the federal Food Drug and Cosmetic Act, and pay criminal fines and forfeitures of just over $100 million. Elan also paid $102,890,517 plus interest, in civil damages for violations of the False Claims Act resulting from improper billings to federal and state health insurance programs such as Medicare and Medicaid. The Elan criminal and civil settlements combined exceeded $203 million. Elan also entered into a Corporate Integrity Agreement with the HHS- OIG.
This whistleblower case involved allegations of improper “off-label” marketing and billing of the anti-seizure drug Zonegran®, first by Irish pharmaceutical manufacturer Elan Corporation and then later by Japanese pharmaceutical company Eisai, Inc., which bought the rights to the drug from Elan in 2004. Eisai earlier agreed to pay $11 million in civil damages under the False Claims Act to the federal and state governments for the period of time the off-label marketing continued after it acquired the rights to the drug (see related Eisai settlement).
The relator’s False Claims Act qui tam complaint alleged that the defendant companies marketed Zonegran, which was approved by the U.S. Food and Drug Administration (FDA) only for reducing seizures, for weight loss and mood stabilization as well. The drug was not approved for either of those uses and thus marketing the drug for those indications constituted “off- label” marketing.
The increase in drug prescriptions resulting from this off-label marketing not only caused improper billings to the federal and state governments, but it also undercut the authority of the FDA, which determines the safety and efficacy of drug products and approves (and limits) their uses.
United States, et al. ex rel. Relator v. Elan Corporation, PLC, and Eisai Inc., Civil Action No. 04-11594-RWZ (D. Mass.)