Elan: The Promotion Campaign Before the Sale to Eisai

The Elan Zonegran settlement included a $102,890,517 civil payment to resolve allegations of off-label promotion that caused government health programs to pay for uses they did not cover. In its account of Elan’s criminal plea agreement, the Justice Department said Elan took an epilepsy drug into markets for mood disorders, headaches and weight loss, targeted non-epilepsy prescribers and paid physicians to influence prescribing. When Elan sold Zonegran to Eisai, the sales force went with it. According to the Justice Department, some of the off-label marketing continued under the new owner.

The December 15, 2010 announcement named Irish manufacturer Elan Corporation PLC and its U.S. subsidiary, Elan Pharmaceuticals Inc. The civil resolution belongs among pharmaceutical fraud cases in which the government’s allegation connects a manufacturer’s sales campaign to claims submitted by others. A Massachusetts physician brought the whistleblower case that produced separate civil settlements with Elan and Eisai.

What Is Considered Off-Label Promotion?

Off-label promotion means marketing a drug for a use outside its Food and Drug Administration approval. In this case, Zonegran’s approval covered partial epileptic seizures in adults over the age of 16. In its account of Elan’s criminal plea agreement, the Justice Department described a campaign that reached well beyond that population and that condition.

The promoted uses listed in that account included mood stabilization for mania and bipolar disorder, migraine headaches, chronic daily headaches, eating disorders, obesity or weight loss, and seizures in children under the age of 16. The pediatric use matters on its own: even a pitch about seizures could reach patients outside the approved age group.

The same account says Elan targeted prescribers outside epilepsy practice. The campaign sought a market beyond the patients the drug was approved to treat.

How the Promotion Reached Government Claims

The civil allegation was that Elan’s promotion caused false claims for uses that were not medically accepted indications and therefore were not covered by government health care programs.

The manufacturer can influence the prescription while a pharmacy or healthcare provider submits the bill. The False Claims Act reaches the company that causes the false claim. Taxpayers were paying for a market Elan allegedly built around uses those programs did not cover.

The use for which a drug is covered is a separate part of that chain. We examine what physicians were told, what condition the prescription treated and how it was billed. The sales story and the reimbursement story have to meet.

Physician Payments Behind the Prescription

In its account of the criminal plea agreement, the Justice Department said Elan paid physicians to persuade them to prescribe Zonegran for off-label uses. The kickback it described bought prescribing influence: Elan supplied the money, the physician wrote the prescription, and a government health program could receive the bill.

For an insider reviewing an honorarium, consulting fee or research payment, the work actually performed and the recipient’s prescribing relationship help explain what the company bought.

For someone on the physician side, the conversation surrounding the payment may be the part they know best. For someone inside the manufacturer, the useful connection may run from a budget or payment approval to the sales objective it supported. Our work is to connect those accounts to the alleged prescribing incentive, rather than leave the payment isolated on a ledger.

Elan’s Civil Settlement Reached Federal and State Programs

The civil settlement divided the money between a $59,491,477 federal share and a $43,399,040 state Medicaid share. The allocation reflects the government’s allegation that the promotion reached publicly funded prescriptions, with both federal and state programs sharing in the civil resolution.

Elan also agreed to a corporate integrity agreement with the Department of Health and Human Services’ Office of Inspector General.

Eisai Bought the Drug and the Sales Force

Eisai Inc. purchased Zonegran and its sales force from Elan in April 2004. Compared with Elan’s payment for the earlier campaign, Eisai’s smaller $11 million civil settlement resolved allegations that its own off-label promotion caused government claims for uses the programs did not cover.

The Justice Department’s account of the transfer acknowledged that Eisai retrained the sales force and took steps to stop illegal marketing. It also said some off-label marketing continued and Eisai benefited from Elan’s earlier promotion. The drug had a new owner and the sales force had new training, yet the government said the old marketing continued.

The government followed the marketing across the sale. Elan’s pre-sale conduct and Eisai’s post-acquisition conduct produced separate resolutions within the same whistleblower case. Selling Zonegran had not ended the story of the campaign Elan built around it.

For an insider, the handover is a useful dividing line. We examine the sales practices carried into the acquisition, the instructions that changed and the conduct that followed. A new training program says what the buyer wanted the sales force to do. What happened in the field answers the next question.

What Is an Example of a Pharmaceutical Whistleblower Case?

The Elan Zonegran case began with a Massachusetts physician’s qui tam case under the False Claims Act. The same action also contained the allegations resolved by Eisai’s settlement. It is a pharmaceutical whistleblower case brought from the physician side of the business.

The Justice Department announced that the physician would receive more than $10 million from the federal share of Elan’s civil recovery and more than $1 million from the federal share of Eisai’s civil recovery.

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. The Zonegran case shows why pharmaceutical whistleblowers include people outside the manufacturer’s payroll. A physician who understands the prescribing conversation may bring a perspective different from the employee who sees the sales instructions.

Sales Instructions Can Explain the Campaign

An insider’s account becomes more useful when it connects the public sales message to what the company expected its employees to deliver. Endo Pharmaceuticals’ Lidoderm case, with its civil resolution announced in 2014, offers a concrete parallel. A whistleblower alleged in the third amended complaint that management’s quotas required off-label sales:

The same complaint alleged that Endo’s marketing department sent restricted off-label study material to physicians without being asked, placing the promotion at the company level rather than with an individual sales representative.

The Zonegran allegations likewise make the intended prescriber and intended use worth examining together. The targeting and physician payments described in Elan’s criminal plea agreement put the manufacturer’s decisions behind the prescribing conversation.

You Know What the Sales Campaign Asked For

If you saw a drug’s sales message reach beyond its approved market, talk with our whistleblower experts about the campaign you know. We build the case with you and bring in pharmaceutical whistleblower lawyers who understand off-label promotion, physician payments and government reimbursement. We stay beside you as the evidence becomes a case and through the pursuit of a recovery.