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Eisai Inc. (ESALF.PK) Insurer Balks at Paying Whistleblower Claim


11/26/2012 8:11:51 AM

For the past several years, nearly every large drugmaker has agreed to pay settlements with the US federal government over allegations of illegal promotions. Generally, these deals result from separate, but related lawsuits filed by former employees who claim they were fired in retaliation for complaining about alleged off-label marketing practices. Taken together, the growing number of settlements have resulted in multi-billion payments to federal and state governments, as well as separate payments to former employees. Yet critics say these sums are regarded as a cost of doing business when the drugs involved ring the register at a much higher rate over an extended period of time. But what happens when an insurer balks at paying a claim? Suddenly, the cost might seem real. This is what Eisai executives are facing. The drugmaker, which is based in Japan but has US offices in New Jersey, is now suing Zurich American Insurance for refusing to pay a claim concerning a whistleblower lawsuit filed by a former sales rep. The underlying details follow a familiar pattern. In this case, Michael Keeler was a sales rep in Florida who balked at alleged Eisai managerial efforts to promote the Ontak cancer treatment for unapproved uses. After complaining that compensation was wrongfully tied to such promotions, he was eventually terminated, according to his lawsuit.

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