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Botox Maker Pleads Guilty to Violating FDCA, Pays $600M; Whistleblowers Receive Near $40M Reward

September 5, 2010

Whistleblowers who alerted the government to off-label marketing of Botox and other violations of the Food Drug and Cosmetics Act (FDCA) by Allergan Inc. will receive $37.8 million out of over $600 million recovered. Several qui tam actions filed in the Northern District of Georgia by Dr. Amy Lang, Charles Rushin, Cher Beilfuss, Kathleen O’Conner-Masse, and Edward Hallivis, resulted in a detailed investigation by DoJ and ultimately in a guilty plea by Allergan.  According to Sally Yates, U.S. Attorney for the Northern District of Georgia:

“The FDA had approved therapeutic uses of Botox for only four rare conditions, yet Allergan made it a top corporate priority to maximize sales of far more lucrative off-label uses that were not approved by FDA…. 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 FDA approval process ensures that pharmaceutical companies market their medications for uses that are proven to be safe and effective, and this case demonstrates that companies that fail to comply with these rules face criminal prosecution and stiff penalties.”

In addition to paying the $600 million in settlement, fines, and forfeiture, Allergan will be subject to a 5-year Corporate Integrity Agreement, requiring:

  • that the board of directors (or a committee of the board) annually review the company’s compliance program and pass a resolution that it has implemented an effective compliance program;
  • that certain senior executives annually certify that their departments or functional areas are compliant with federal health care program requirements;
  • that Allergan send doctors a letter notifying them about the settlement; and
  • that the company post on its website information about payments to doctors, such as honoraria, travel, or lodging.

To report Medicare or Medicaid fraud or other False Claims Act violations, contact Frohsin & Barger.

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