Elan’s Epilepsy Drug Is Toast, But a Prescribing Doc Is Up $11 M | BNET

The case was brought by a doctor whom the company paid to participate in its illegal scheme. Basically, the psychiatrist took the company’s money, became an “advisor,” enjoyed a conference/vacation in Boca Raton, Fla., and in response increased his prescriptions of the drug. Then he turned around and sued the company in a whistleblower action. He won $11 million of the settlement.

The settlement also highlights again Elan’s infamously incompetent management: The settlement is almost as large as the entire sales of the drug. When most companies settle off-label cases with the government, the payment they make is generally much less than the total revenues they earned selling the drug. In this way, such settlements become part of the pharmaceutical business model. Elan’s settlement, however, is as large — possibly larger — than the drug’s entire revenues for the company since it was approved, according to the whistleblower suit that triggered the settlement. The drug’s patent expired in 2005, and with it all its revenue earning power. In the face of cheap generic competition, Elan won’t be able to get that money back from future Zonegran sales.

via bnet.com

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