Botox maker Allergan ordered to pay $660m over misbranding

Misbranding led to unlawful use of the drug for unapproved uses

Five whistleblowers to share $US37.8 million      

Allergan Inc, manufacturer of eye-muscle-disorders-treatment Botox, early this month agreed to pay $US600 million ($A660 million) to settle a years-long federal investigation into its marketing of the top-selling, botulin-based drug.
The Justice Department and the company said in a statement Allergan will plead guilty to one misdemeanour charge of “misbranding”, in which the company’s marketing led physicians to use Botox for unapproved uses, included the treatment of headache, pain, spasticity and cerebral palsy in children.

Companies are prohibited from promoting drugs for unapproved, or ‘off-label’ uses.
Botox is most famous for its ability to smooth frown lines on aging foreheads, but the drug – introduced in 1989 – is also approved to treat neck spasms, eye muscle disorders (strabismus and blepharospasm) and excessive underarm sweating.

Last year the drug won approval to treat spasms in the elbows, wrists and fingers. The drug is also widely used off-label to treat cerebral palsy in children as well as in adults, and Allergan says it is in discussions with US health regulators to approve the use of Botox for children with the neuromuscular disorder.
Allergan said it will pay $US375 million in connection with the plea, which includes the forfeiture of $US25 million in assets. Additionally, the company will pay $US225 million in civil fines – $US210 million to the federal governments and the rest to several states – related to the investigation, although the company denies liability for the civil claims.

Allergan, based in Irvine, California, also struck an agreement with the Department of Health and Human Services' Office of the Inspector General that requires the company to submit compliance reports, and to post on its website any payments to doctors, such as honoraria, travel or lodging.

The company “paid kickbacks to induce physicians to inject Botox for off-label uses and also taught them how to bill for off-label uses, including coaching on how to miscode Botox claims leading to millions of dollars of false claims being to submitted to federal and state programs”, Assistant Attorney General Mr Tony West said.

“The FDA had approved therapeutic uses of Botox for only four rare conditions, yet Allergan made it a top corporate priority to maximise sales of far more lucrative off-label uses that were not approved by the FDA,” Ms Sally Yates, US Attorney for the Northern District of Georgia, said. “Allergan further demanded tremendous growth in these off-label sales year after year, even when there was little clinical evidence that these uses were effective.”

The investigation was sparked by a whistleblower complaint, officials said, and five whistleblowers will split $US37.8 million of the government’s share of the settlement.

Allergan’s product sales topped $US4.4 billion in 2009, with Botox accounting for more than $US1.3 billion of that total.

The Justice Department’s investigation covered Allergan’s marketing of Botox from 2001 through at least 2008.
Analysts say the settlement is a positive for the company’s stock because it removes uncertainty.
In recent years, federal investigators have reached multi-billion dollar settlements with Pfizer, Eli Lilly and other drug companies over their marketing practices.

In guidelines published earlier this year, the American Academy of Neurology endorsed Botox as an “effective and generally safe treatment” for children with cerebral palsy. While the use is not approved by the Food and Drug Administration, the guidelines stated that there are more studies supporting Botox than other movement-disorder drugs.

Botox works by blocking the connections between nerves and muscle, temporarily paralysing muscles that cause wrinkles as well as certain types of spasms. The drug is a purified form of botulinum, one of the most toxic substances in the world. As part of the settlement, Allergan agreed to drop a lawsuit against the FDA in which the company pressed for greater leeway to discuss off-label uses with doctors.

The company argued it had a First Amendment right to educate doctors about how to safely use Botox, even for uses that are not currently approved. FDA rules are designed to stop companies from promoting drugs for uses that haven’t been federally confirmed as safe and effective.

Some legal experts speculated that Allergan’s lawsuit against FDA was primarily aimed at gaining leverage in its negotiations with the Justice Department, which was a separate matter.