Elan agrees to settle Zonegran sales

Investigation of sales and marketing expects Elan subsidiary - Elan Pharmaceuticals - to plead guilt

Elan has reached an agreement in principle with the US Attorney's Office for the District of Massachusetts with respect to the previously disclosed investigation of sales and marketing practices for Zonegran (zonisamide), an antiepileptic prescription medicine that Elan divested in 2004, done by the US Department of Justice.

Zonisamide is a sulfonamide anticonvulsant approved for use as an adjunctive therapy in adults with partial-onset seizures, infantile spasm, and mixed seizure types of Lennox-Gastaut syndrome, myoclonic, and generalised tonic clonic seizure.

Elan expects to pay $203.5m as part of a comprehensive settlement for all US federal and related state Medicaid claims after the agreement is finalised.

As part of this agreement in principle, Elan's US subsidiary, Elan Pharmaceuticals, expects to plead guilty to a misdemeanour violation of the US Federal Food, Drug and Cosmetic Act and to enter into a Corporate Integrity Agreement with the Office of Inspector General of the US Department of Health and Human Services.

While Elan expects to expects to negotiate and enter into it final settlement and Corporate Integrity Agreements, it is not sure about when or if any settlement will be finalised or, if a settlement is finalised, what the final terms of the settlement might be.

The proposed resolution of the Zonegran investigation could give rise to other litigation by state government entities or private parties.

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