Violations to cost Elan €152m

ELAN has formally agreed to pay over $200 million (€152m) in a settlement payment concerning marketing violations regarding one of its former drug products.

News of the potential settlement — surrounding illegal marketing activity and misbranding of the epilepsy treatment, Zonegran, which Elan disposed of six years ago — first arose earlier this year. Elan’s most recent figures — for the three months to the end of September — showed a net loss of $43.6m (nearly €32m), due mainly to a charge for the Zonegran settlement.

The once-off charge had already heavily skewed the company’s first-half figures, which showed a $215m net loss.

Yesterday, Elan confirmed it would pay the $203.5m settlement, but said that no further charge to the company’s earnings — than that previously announced — will be recorded in connection with the settlement.

The company added that it was pleased to have reached this agreement, “which concludes a long-standing legal matter on a product divested over six years ago” and added that it remains “committed to adhering to the highest ethical and legal standards.”

The Dublin-headquartered group’s US subsidiary — Elan Pharmaceuticals Inc — has agreed to plead guilty, in federal court in Boston, to a misdemeanour charge of misbranding Zonegran.

The US drug regulators had approved the product for the treatment of epileptic seizures in adult sufferers.

However, the company promoted it for additional uses, including mood stabilisation, bi-polar disorder, migraine and weight loss.

It has also been reported that Elan’s marketing efforts included paying doctors to persuade them to prescribe Zonegran for ‘off-label’ (non-epilepsy) health problems.

Elan’s senior vice president and general counsel, John Moriarty, said the company has since “developed a strong compliance programme, based upon best industry practices”.