Judge Approves $600 Million Botox Settlement
Oct 6th 2010 3:15AM
Updated Oct 6th 2010 3:21AM
A federal investigation into Allergan's (AGN) misleading marketing of its wrinkle-smoothing Botox medication is over after a judge in Georgia on Tuesday approved the pharmaceutical firm's decision to pay $600 million and plead guilty to misbranding the product.
U.S. District Court Judge Orinda D. Evans sentenced the Irvine, Calif.-based company to pay $375 million in connection with the plea. The company also said it would pay $225 million in civil fines.
The sentencing came a month after the company said in a statement that it would admit to a charge that the company's marketing tactics led physicians to use Botox for unapproved uses such as headaches, pain and cerebral palsy in children between 2000 to 2005.
Botox, which was introduced in 1989, is one of Allergan's top drugs, accounting or more than $1.3 billion of the company's $4.4 billion sales in 2009. The drug is most famous for its ability to smooth frown lines on aging foreheads, but it's also approved to treat neck spasms, eye muscle disorders and excessive underarm sweating.
The drug last year won approval to treat spasms in the elbows, wrists and fingers. But it's also widely used off-label to treat conditions such as cerebral palsy, and Allergan says it is working with U.S. health officials to approve the use of Botox for children with the neuromuscular disorder.
Federal prosecutors launched the investigation into Allergan when two whistle blowers - a physician and a Botox sales representative - filed a complaint in Atlanta, said U.S. Attorney Sally Quillian Yates. She said Allergan put potential profits ahead of the federal approval process, risking public safety.
"We hope other companies are paying close attention to what can happen if they don't follow the rules and rush towards making profits," she said.