Allergan To Pay $600 Million To Settle Charges Related To Botox
DOW JONES NEWSWIRES
Allergan Inc. (AGN) said it has agreed to pay the U.S. government $600 million to settle criminal and civil charges related to U.S. sales and marketing of Botox.
The charges involve alleged marketing of the antiwrinkle treatment, best known for its use in cosmetic procedures, for uses not approved by the Food and Drug Administration, including headache, pain, spasticity and juvenile cerebral palsy. The product accounts for about a third of Allergan’s revenue and in the latest quarter saw sales grow 7% to $360.5 million.
The drug maker agreed to plead guilty to a misdemeanor “misbranding” charge, which indicates its labeling didn’t contain adequate directions for the treatment’s intended uses. Misbranding is known as a strict liability offense and doesn’t imply false or deceptive conduct. The company will pay $375 million in connection with the criminal settlement.
Allergan also said it has also agreed to pay $225 million to resolve civil claims asserted by the Justice Department under the civil False Claims Act.
The company expects to record fourth-quarter pretax charges of $610 million to $615 million in connection with 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 S. Ingram, Allergan’s executive vice president.
As part of the deal, Allergan will pay for third-party monitoring for five years of the company’s compliance efforts.
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