The specialty pharmaceutical company Allergan has agreed to pay $600 million to settle civil and criminal accusations that it illegally marketed Botox, the drug used in antiwrinkle injections, for medical uses for which the drug had not been approved.
In the settlement with the Justice Department, the company agreed to plead guilty to one misdemeanor charge and pay $375 million to the government for misbranding — making statements about a drug for a use not approved in the product label by the Food and Drug Administration.
A news release by the Justice Department issued Wednesday morning said that Allergan had made it a top corporate priority to maximize sales of Botox for off-label uses. The statement continued:
“In 2003, Allergan doubled the size of its reimbursement team to assist doctors in obtaining payment for off-label Botox injections. Allergan held workshops to teach doctors and their office staffs how to bill for off-label uses, conducted detailed audits of doctors’ billing records to demonstrate how they could make money by injecting Botox, and operated the Botox Reimbursement Hotline, which provided a wide array of free on-demand services to doctors for off-label uses. Allergan also lobbied government health care programs to expand coverage for off-label uses, directed physician workshops and dinners focused on off-label uses, paid doctors to attend “advisory boards” promoting off-label uses, and created a purportedly independent online neurotoxin education organization to stimulate increased use of Botox for off-label indications.”
Allergan has agreed that, from 2000 to 2005, its marketing resulted in the use of Botox for unapproved uses including the treatment of headaches, pain, spasticity and juvenile cerebral palsy, the company said in a statement Wednesday.
Allergan, based in Irvine, Calif., also agreed to pay $225 million to resolve civil charges that it had caused false claims to be submitted to Medicare and Medicaid. However, the company said it denied liability in the civil accusations.
“The significance of the case is that Allergan promoted Botox for off-label uses, uses that were not approved by the F.D.A. as being safe and effective,” said Marcella Auerbach, a lawyer representing two whistle-blowers in the case.
Allergan said it would take a one-time pretax charge in the third quarter of $610 million to $615 million to cover the settlement and certain legal fees. That amounts to nearly half the annual sales of Botox. The drug had worldwide sales last year of $1.3 billion.
The criminal and civil settlements are both contingent on the approval of a federal court in Georgia, Allergan said.
Since 1989, the Food and Drug Administration has approved Botox as a treatment for conditions like eyelid spasms, certain neck muscle problems, excessive underarm sweating, as well as a cosmetic treatment to smooth furrows between the eyebrows.
Earlier this year, the F.D.A. approved Botox as a treatment for increased muscle stiffness in the elbow, wrist and fingers. The agency is currently reviewing an application from Allergan for Botox treatments for chronic migraines.
Allergan said it was also in discussions with the F.D.A. regarding Botox to treat juvenile cerebral palsy, a use for the drug that is approved in 70 countries — but not in the United States.
The terms of the settlement also required Allergan to dismiss a First Amendment lawsuit the company brought last year against the government over whether the company had a right of free speech to disseminate scientific information to doctors who asked about unapproved uses of Botox.
In addition, Allergan has entered into a five-year corporate integrity agreement with the government under which an outside party will monitor the company’s compliance with drug regulations.
Shares of Allergan rose in morning trading after the company announced the settlement.
By: NATASHA SINGER