Wednesday, September 1, 2010

$600 Million Settlement in Botox Case

The pharmaceutical company Allergan has agreed to pay $600 million in criminal and civil penalties for aggressively promoting its flagship drug Botox for uses not approved by the Food and Drug Administration (FDA), for paying kickbacks to doctors, and for other violations of the False Claims Act.
Today’s announcement represents the culmination of a complex, three-year investigation by the FBI and our federal partners in which millions of documents and dozens of hours of electronic evidence were collected.
“This case sends a clear message,” said Brian Lamkin, special agent in charge of our Atlanta Division, “that the FBI will not allow manufacturers to promote their prescriptions or products for uses beyond their intended purpose.”

Botox is widely known for its cosmetic use, but the FDA has approved the drug for therapeutic treatment in a few rare cases. Still, for nearly a decade, Allergan—an international company based in California—made it a top corporate priority to maximize sales in the lucrative off-label market. The company promoted the drug to treat headaches, pain, spasticity, and juvenile cerebral palsy—all without FDA approval.

"It all started when citizens came forward to report wrongdoing."

Scott Stephan
FBI Special Agent

As part of that promotion, Allergan provided kickbacks to doctors in the form of cash, travel, and meals and held seminars instructing physicians on how to bill Medicare for off-label procedures. The company also made false and fraudulent statements regarding Botox’s efficacy for those off-label treatments “even when there was little clinical evidence that these uses were effective,” said Sally Yates, U.S. Attorney for the Northern District of Georgia.
Our investigation began in 2007 in Atlanta, when a doctor and an Allergan employee came forward to complain about Allergan’s practices. “We took a look at the numbers involved in the case and knew immediately that it was not regional but national in scope,” said Special Agent Mike Badolato. Joining in the investigation were the FDA’s Office of Criminal Investigation and the Health and Human Services Administration’s Office of Inspector General.
Agent Badolato and Special Agent Scott Stephan, who both specialize in health care fraud investigations, traveled the country gathering evidence in the case. “One of the benefits the FBI brings to the table in health care fraud investigations like this is the resources we can marshal,” Stephan said. “We have the ability to travel and to cover leads almost anywhere.”
U.S. Attorney Yates said Allergan made “hundreds of millions of dollars” promoting the off-label uses of Botox. And Tony West, Assistant Attorney General for the Department of Justice’s Civil Division, pointed out that this is not a victimless crime.
“When our public health care programs are burdened with fraudulent charges, it drives the cost of health care up for all of us—consumers pay more in premiums, companies pay more to cover their employees,” West explained. “And when a pharmaceutical manufacturer violates the integrity of the drug approval process established by Congress and the FDA by paying kickbacks to encourage the off-label use of an unapproved drug, that not only undermines the judgments of health care professionals, it also threatens to put patients’ health and safety at risk.”
Agents Stephan and Badolato, on hand for today’s announcement in Washington, were pleased with the outcome of the case. “This was a good team effort,” Stephan said. “And it all started when citizens came forward to report wrongdoing.”

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