Botox Settlement for $600M Reached to Resolve Lawsuits Over Marketing

Allergan Inc. has agreed to plead guilty to charges that it illegally marketed Botox for off-label uses, and will pay $600 million to settle the charges brought by the U.S. government. 

The Botox settlement was announced in a press release issued yesterday by the U.S. Department of Justice (DOJ), who has accused Allergan of promoting Botox for “off-label” use in alleviating some of the symptoms of cerebral palsy, as well as for the treatment of headaches, pain and spasticity. According to allegations raised, the company went as far as training doctors how to bill for unapproved uses and created a Botox Reimbursement Hotline to help doctors get reimbursed for using Botox in ways that have not been sanctioned by the FDA.

The terms of the settlement include an admission of guilt by Allergan, Inc., a criminal fine of $375 million, and a $225 million civil settlement with the federal government. The civil aspect of the Botox settlement resolves allegations that the company’s off-label marketing practices included teaching doctors how to falsify reimbursement claims in order to trick the government into subsidizing the use of Botox for unapproved applications. The civil aspect includes several whistleblower lawsuits brought by plaintiffs who will share in the federal civil settlement amount.

One of the charges against Allergan by DOJ is that it abused its FDA approval for the treatment of cervical dystonia, a muscle and movement disorder in the shoulders that causes involuntary movements and pain. The DOJ alleges that Allergan trained doctors to prescribe Botox to treat any headaches or neck pain under the guise of cervical dystonia, telling them that headaches and pain were the only symptoms needed to diagnose the disease, even when there were no other signs of the ailment.  

Botox, which contains small quantities of the bacteria associated with the development of botulism poisoning, is approved for both cosmetic use to reduce the appearance of wrinkles in the skin and to treat medical conditions such as strabismus (crossed eyes), hyperhidrosis (excess sweating), cervical dystonia (involuntary contractions of the neck muscles) and blepharospasms (involuntary blinking of the eye). However, it also commonly used off-label at high doses to treat stiff and jerky movements associated with cerebral palsy in children.

A number of problems with Botox have been reported among users, where the medication can spread from the area of the injection to other parts of the body. This can result in symptoms of botulism poisoning, such as paralysis, difficulty swallowing, respiratory distress and other issues. These Botox reactions have most commonly been seen among children with cerebral palsy, where the typical Botox dose is substantially larger.

Federal regulations make it illegal for drug companies to promote their products for uses that have not been approved by the FDA, even though it is legal for doctors to prescribe drugs for any use they feel is appropriate. However, doctors are rarely reimbursed by the federal government through Medicaid and other programs when they use drugs for such unapproved applications.

Allergan has been a vocal opponent of the off-label marketing ban. In fall of 2009, the company filed a lawsuit against the FDA in U.S. District Court in Washington, D.C., saying that the FDA’s ban on “off-label” drug promotion by pharmaceutical companies violated their first amendment right to free speech.

In May, a Botox lawsuit over botulism poisoning filed by Sharla Helton, an Oklahoma City doctor, resulted in a $15 million jury award in a product liability claim. Helton alleged that she suffered botulism after receiving injections to combat wrinkles in 2006.

Helton’s victory came about three months after an Orange County jury ruled in favor of Allergan in a wrongful death Botox lawsuit brought by Dee Spears, whose daughter, Kristen Spears, died in November 2007 after receiving injections of Botox to treat her cerebral palsy. Allergan attorneys argued that Spears’ daughter died of complications due to cerebral palsy, not as a result of problems with Botox.

Following that defense verdict, Allergan began to go after Spears for their defense costs in the Botox litigation, suing her for $460,000 in legal fees. Spears was unemployed at the time, having lost her job during the trial. Her attorney has called Allergan’s tactics corporate bullying.

In February 2008, the FDA issued a warning about the risks associated with use of Botox to treat cerebral palsy, after receiving a number of adverse event reports involving sudden death, breathing problems and other potentially life-threatening injuries. A “black box” Botox warning was added to the medication in August 2009, warning about the risk of botulism-like side effects, such as swallowing and breathing difficulties, that can occur if the injection spreads to other areas of the body.

More than a dozen people have filed injury lawsuits over Botox against Allergan, alleging that the company illegally promoted the medication for non-approved uses and failed to adequately warn about the risk of these severe and potentially life-threatening Botox injuries.