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Elan to Settle Zonegran Investigation for $204 Million

From Associated Press (July 15, 2010)

NEW YORK -- Irish drug maker Elan Corp. PLC said Thursday it agreed to pay $203.5 million to settle investigations into sales and marketing practices related to the epilepsy drug Zonegran.

Elan's U.S. division Elan Pharmaceuticals Inc. expects to plead guilty to a misdemeanor violation of the Food, Drug and Cosmetic Act, the company said. If the settlement is approved, Elan said it would resolve all federal and state Medicaid claims into the marketing of Zonegran. The company said it is setting aside $206.3 million to cover the settlement and related costs.

Elan said it came to terms with the U.S. Attorney's Office for the District of Massachusetts.

In January 2006, Elan disclosed that the U.S. Department of Justice and the Department of Health and Human Services were looking into its marketing practices for Zonegran.

Zonegran, or zonisamide, was developed by Dainippon Pharmaceutical Co. The Food and Drug Administration approved the drug in 2000. Elan had the rights to Zonegran in North America and Europe. It sold the product to Japanese drug maker Eisai Co. in 2004 for up to $223.5 million.

U.S. shares of Elan slipped 21 cents, or 4 percent, to close at $5.08.


Posted: July 2010