Botox maker fined $600 million for health claims; pleads guilty to criminal charge
The Justice Department today came down hard on Allergan for making such claims, announcing a settlement that has Allergan pleading guilty to one misdemeanor criminal count of promoting Botox for off-label use as well as civil charges. Of the $600 million, $375 million is a criminal fine and the rest is a civil settlement that will be split with some state attorneys general, who in 2008 had sued the company.
"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," Sally Yates, U.S. Attorney for the Northern District of Georgia, said in a statement.
The Justice Department and the Food and Drug Administration under the Obama administration have taken a dim view of Big Pharma attempts at maximizing profits by promoting drugs for uses they have not been approved for. The Botox case is the latest example.
The Food and Drug Administration first approved Botox's use in 1980, and in 2002 and 2004 expanded the uses for which it is approved. Still, despite its common cosmetic use, the FDA approvals related mostly to muscle contraction problems including involuntary neck muscle contraction.
Allergan has sought FDA approval to also use the drugs for headaches and for cerebral palsy, but the FDA hasn't acted yet. Some other countries have approved Botox's use for cerebral palsy.
The Justice Department said today that despite the limited approval, the company pushed the expanded use of the products to doctors, acting illegally.
"Allergan further demanded tremendous growth in these off-label sales year after year, even when there was little clinical evidence that these uses were effective," said Yates. "The FDA approval process ensures that pharmaceutical companies market their medications for uses that are proven to be safe and effective, and this case demonstrates that companies that fail to comply with these rules face criminal prosecution and stiff penalties."
Allergan tried to head off the charges by filing a potentially groundbreaking suit accusing the government of illegally restraining it from engaging in its First Amendment right to offer truthful information to doctors. That suit, which could have imposed new limits on the FDA's right to regulate truthful, was dropped today as part of the settlement.
Allergan said today it was "disappointed" the suit had to be dropped but that it settled because the settlement "was in the best interest of its stockholders."
The settlement didn't please some public health groups.
"It's a much smaller fine than it should be," said Dr. Sidney M. Wolfe, founder and director of Public Citizen's Health Research Group. "As long as companies keep doing this and selling more drugs than the fines [they pay], it will keep on."
Wolfe noted the $600 million fine was considerably smaller than the $2.3 billion Pfizer paid a year ago to settle similar charges of promoting off-label uses of its drugs.
He said much of Botox's revenue comes from off-label use and said that while the settlement was based on activities through 2005, the off-label use has continued since then.
"The fines are too low," he said.