Allergan agreed to pay $600 million to US Government

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Allergan, Inc. (NYSE: AGN) announced that it has reached a resolution with the United States Department of Justice (DOJ) regarding the previously reported Government investigation into Allergan’s past U.S. sales and marketing practices relating to certain therapeutic uses of BOTOX(R) (onabotulinumtoxinA).

Allergan has been cooperating with the Government in a multi-year investigation in Atlanta, Georgia, regarding the use of BOTOX(R) for certain therapeutic treatments covering a period that commenced in January of 2000. 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.

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.

In addition, Allergan has agreed to pay $225 million to resolve civil claims asserted by DOJ under the civil False Claims Act. The civil settlement is an element of a global settlement that Allergan believes is in the best interest of its stockholders. However, Allergan denies liability associated with these civil allegations and does not believe there is merit to them factually or legally.

Source: Allergan, USA

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