Elan Corp. and Eisai, Inc. to Pay $214 Million in Whistleblower Settlement
December 20, 2010 by casey
On December 15, 2010, the settlement of a whistleblower case filed through the False Claims Act was announced. The suit involved allegations of fraudulent “off-label” promotion of the anti-seizure drug Zonegran, first by Irish pharmaceutical manufacturer Elan Corp., and then by Japanese company Eisai, Inc., which bought the rights to the drug in 2004.
The complaint alleged that the companies marketed Zonegran for weight loss and mood stabilization, although the drug was approved only for reducing seizures. The resulting increase in prescriptions from this off-label marketing caused improper billings to the federal and state governments. It also undercut the authority of the U.S. Food and Drug Administration, which determines the safety and efficacy of drug products and approves and limits their uses.
According to the settlement, Elan has agreed to plead guilty to the improper introduction of misbranded drugs into interstate commerce, in violation of the Food Drug and Cosmetic Act. The company will pay just over $100 million in criminal fines and forfeitures to resolve these allegations. The company is also paying $102,890,517 plus interest in civil damages for improper billings to federal and state health insurance programs.
Eisai, Inc., which has owned the rights to Zonegran since 2004, made a separate agreement to pay $11 million in civil damages to the federal and state governments for the period of time off-label marketing continued after its acquisition of the drug. No criminal charges were pressed on Eisai, Inc.
Federal and State False Claims Acts allow private citizens with detailed knowledge of fraud to bring an action on behalf of the governments and are entitled to a portion of the recovery of dollars stolen from the government. In addition to civil penalties of $5,500 to $11,000 per claim, the statutes allow the government to recover three times the amount it was defrauded.
If you are seeing fraud on the government, contact us by calling 800-377-1812 for strictly confidential advice from experienced counsel, with no fee obligation.
