Elan pays $206 million to settle with US DoJ over past Zonegran sales and marketing activities

Dublin, Ireland-based drugmaker Elan (NYSE: ELN) says that it has finalized the agreement-in-principle with the US Attorney's Office for the District of Massachusetts to resolve all aspects of the Department of Justice's investigation of sales and marketing practices for Zonegran (zonisamide), an anti-epileptic prescription medicine that Elan divested to Japan’s Eisai  (TYO: 4523) in 2004. In a separate civil settlement, Eisai’s US subsidiary will pay $11 million to resolve civil liability for off-label marketing of Zonegran.

According to the DoJ, Elan promoted the sale of Zonegran for a wide variety of improper off-label uses including mood stabilization for mania and bipolar disorder, migraine headaches, chronic daily headaches, eating disorders, obesity/weight loss and seizures in children under the age of 16.

Consistent with the terms of the agreement-in-principle announced in the summer (The Pharma Letter July 19), Elan will pay $203.5 million pursuant to the terms of a global settlement resolving all US federal and related state Medicaid claims. In the second quarter of 2010, Elan disclosed a $206.3 million reserve charge for the settlement, interest and related costs. No additional charge to the Company's earnings will be recorded in connection with this settlement.