Botox settlement worth $600M

Keith Loria Sep. 1, 2010, 3:12pm


SALEM, Ore. (Legal Newsline) - Oregon Attorney General John Kroger announced on Wednesday that a health care company will pay $600 million to the federal government and all 50 states over the alleged off-label marketing of Botox.

A lawsuit alleged that Allergan promoted Botox for uses other than what the U.S. Food and Drug Administration approved it for. While the FDA approved it for strabismus, blepharospasm, cervical dystonia and underarm sweating, Allergan also allegedly claimed Botox would help those suffering from headaches, pain, overactive bladders and spasticity.

Under their marketing plan, Allergan allegedly provided physicians with "free" reimbursement services and support. This allegedly included coaching physicians to use a muscle spasm code in order to obtain a fraudulent reimbursement.

The company also allegedly funded medical education programs, honoraria and grants to promote unapproved uses for Botox in the healthcare community.

As part of the settlement, the company will plead guilty to a single misdemeanor charge of violating the Food, Drug and Cosmetic Act, and pay $375 million in criminal penalties and forfeiture.

Additionally, Allergan also agreed to pay $225 million to resolve civil claims asserted by the Justice Department under the civil False Claims Act.

Of that money, $33 million will go towards the Medicaid program. The Oregon Medicaid program will receive $171,041.76.

The company also agreed to enter into a corporate integrity agreement with the U.S. Department of Health and Human Services, Office of Inspector General, that requires strict scrutiny of all future marketing practices.

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