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Allergan, the maker of the popular anti-wrinkle treatment Botox, has agreed to pay $600 million (about R4.3 billion) to settle a US probe into illegal marketing for so-called off-label uses.
The company said in a statement it agreed to plead guilty to a single misdemeanour "misbranding" charge covering the period 2000 through 2005 and pay the government $375 million (about R2.7 billion).
It will pay an additional $225 million (about R1.6 billion) to resolve civil claims from the Justice Department under the False Claims Act, which relates to fraud.
The misbranding case stems from the promotion of Botox for uses for which it had not been approved between 2000 and 2005, the company said. During that time, its marketing resulted in uses for headache, pain, spasticity and juvenile cerebral palsy. Some of those uses were subsequently approved or are being considered.
Settlement after long civil and criminal probe
The Justice Department said the settlement comes following a lengthy civil and criminal probe.
"Allergan illegally promoted Botox for uses that were not approved as safe and effective by the Food and Drug Administration, including pain, headache, spasticity, and juvenile cerebral palsy," said Assistant Attorney General Tony West.
West said the company "paid kickbacks to induce physicians to inject Botox for off-label uses" among other abuses.
Teaching the doctors
"Allergan also taught doctors how to bill for off-label uses, including coaching doctors on how to miscode Botox claims, leading to millions of dollars of false claims being submitted to federal and state government programs like Medicare and Medicaid," he said.
"These are not victimless crimes. When our public health care programs are burdened with fraudulent charges, it drives the cost of health care up for all of us." The company did not admit fraud but agreed to the settlement.
"This settlement is in the best interest of our stockholders as it resolves all matters at issue in the investigation, avoids substantial costs of litigation, as well as the substantial risks to Allergan associated with government enforcement action in these matters, and permits us to focus our time and resources on productively developing new treatments for patients and the medical community," said Douglas Ingram, Allergan executive vice president.
Botox contains the deadly botulism toxin. When injected in small doses, the chemical paralyses a muscle and prevents it from contracting, eliminating facial wrinkles. It has also been found to have other therapeutic uses.
It was first approved in the US 20 years ago for the treatment of eye muscle disorders. (Sapa, September 2010)
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