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Allergan in $600m Botox settlement

Allergan has agreed to pay $600m as part of a settlement over the company's US marketing practices related to Botox

Allergan has agreed to pay $375m to settle criminal charges and $225m to resolve civil claims as part of a settlement with the US Department of Justice (DOJ) over the company's US sales and marketing practices related to Botox (onabotulinumtoxinA), which the government maintains the firm was promoting for a number of unapproved uses.

The company estimates that it will record pre-tax charges of between $610m and $615m in the third quarter as a result of the settlement.

The multi-year investigation that is resolved by the government settlement concerned Allergan's marketing of Botox between 2000 and 2005.

Allergan has agreed to plead guilty to a single misdemeanor "misbranding" charge that does not involve false or deceptive conduct, the company said.  By pleading guilty to the charge, Allergan is acknowledging only that Botox's labelling did not contain adequate directions for the uses for which the drug was being promoted.

"As part of its plea, Allergan has agreed that between 2000 through 2005, its marketing of Botox resulted in intended uses for the therapeutic treatment of headache, pain, spasticity and juvenile cerebral palsy," the company said in a statement. "These uses were off-label during the relevant timeframe and thus the labelling for Botox did not bear directions for these intended uses, resulting in the product being misbranded."

Although Allergan also agreed to pay to resolve civil claims asserted by the DOJ under the civil False Claims Act, the company said that it "denies liability associated with these civil allegations and does not believe there is merit to them factually or legally."

The settlement calls for Allergan to enter into a  five-year Corporate Integrity Agreement with the US Department of Health and Human Services under which the company will be required to maintain its current compliance program as well as to implement additional monitoring, auditing, training, education, reporting and disclosure procedures. An independent third-party review organisation will assess and report on the compliance efforts under the agreement.

Allergan has also agreed to drop a pending First Amendment lawsuit under which the company was seeking the right to distribute scientific and medical information to healthcare professionals who use Botox off-label to treat spasticity.

During the years covered under the investigation, Botox was approved only for the treatment of the eye muscle disorders strabismus and blepharospasm; the abnormal head position and neck pain associated with cervical dystonia; and severe underarm sweating.

However, earlier this year Allergan won US approval for the treatment of increased muscle stiffness in adults with upper limb spasticity, which the company said was "the most substantial" off-label use during the period covered by the investigation.

In addition, Allergan has filed a marketing application with the FDA for the chronic migraine indication and expects a decision this year. The company is currently conducting phase II clinical trials as part of an effort to win marketing approval for neurogenic and idiopathic overactive bladder.

Allergan also aims to win US approval of Botox for symptoms associated with juvenile cerebral palsy, a use that is approved in many other markets around the world, including the United Kingdom.  However, the FDA has expressed concern about serious adverse events that may be related to use of the drug for that indication. Allergan said discussions with the federal agency on the matter would continue.

2nd September 2010

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