Allergan Inc., the makers of BOTOX (onabotulinumtoxinA) announced that it has agreed to pay US $600 million and to plead guilty to misdemeanor, thus reaching a resolution with the DOJ (US Department of Justice) regarding a previously reported Government investigation into the company's past sales and marketing practices related to specific therapeutic uses of BOTOX.

The DOJ had alleged that the BOTOX maker had tried to enhance BOTOX sales through uses the FDA (Food and Drug Administration) had not approved.

In a press release, Sally Yates, U.S. Attorney for the Northern District of Georgia, stated:

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.

The company says it has been cooperating with the authorities in a multi-year investigation in Atlanta, Georgia, related to BOTOX use for certain therapeutic treatments covering a period starting at the beginning of 2000. In a press release, Allergan states:

The parties have resolved all issues involved in the investigation by entering into a global settlement, which includes the following:

Allergan has agreed to plead guilty to a single misdemeanor "misbranding" charge covering the period 2000 through 2005 and pay to the Government $375 million.

This misbranding charge is known as a strict liability offense, and does not involve false or deceptive conduct.

A prescription drug is deemed misbranded when its labeling does not contain adequate directions for its "intended uses," and, under the Government's view, a use that the U.S. Food and Drug Administration (FDA) has not approved (i.e., an "off-label" use) may be deemed "intended" based on written or oral statements made by the manufacturer.

As part of its plea, Allergan has agreed that between 2000 through 2005, its marketing of BOTOX(R) resulted in intended uses for the therapeutic treatment of headache, pain, spasticity and juvenile cerebral palsy. These uses were off-label during the relevant time frame and thus the labeling for BOTOX(R) did not bear directions for these intended uses, resulting in the product being misbranded.

In March 2010, the FDA approved BOTOX(R) for the treatment of increased muscle stiffness in the elbow, wrist and fingers in adults with upper limb spasticity, the most substantial use during the relevant time period, and thus its label now includes directions for that use. Based on positive Phase III trials announced in September 2008, Allergan has filed for FDA approval of BOTOX(R) for the treatment of chronic migraine and expects FDA to rule on the application in 2010. Allergan is also in Phase III clinical trials investigating the use of BOTOX(R) to treat neurogenic and idiopathic overactive bladder.

Although BOTOX(R) is approved in 70 countries around the world, including the United Kingdom, Canada, Brazil, Hong Kong, and recently Japan, to treat symptoms associated with juvenile cerebral palsy, it is currently off-label in the United States. Allergan is in discussions with the FDA regarding additional clinical development for juvenile cerebral palsy in the United States.

Allergan has also agreed to pay US $225 million to resolve civil claims from the Justice Department. This civil settlement is an element of a global settlement which Allergan says is in the best interests of its stockholders. The company denies liability associated with the civil allegations and claims there is no factual or legal merit to them.

The global settlement comes almost two-and-a-half years into an investigation that many say caused a delay in the approval of migraine therapy. BOTOX might eventually become an approved treatment for migraine.

Bloomberg is quoted as saying that "The $600 million settlement amount appears reasonable based on industry standards."

As part of the agreement, Allergan must drop a lawsuit against the FDA in October 2009 which challenged a government rule prohibiting the marketing of medications for unapproved uses.

Allergan says it expects the FDA to decide later this year on its submission for BOTOX for the treatment of migraine.

Source: Allergan Inc., Bloomberg, Wall Street Journal.



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