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Botox Maker Pays $600 million Settlement

Thursday, September 9th, 2010

botox

The manufacturer of Botox — which months ago lobbied congress to horse-trade a 5 percent tax on Botox injections for the 10 percent federal tax on tanning — has agreed to pay the government $600 million to settle its own misbranding suit.

Allegran Corp. — which lobbied with dermatology leaders against indoor tanning — is admitting it mis-marketed Botox for therapeutic purposes and is paying a massive settlement to end the government investigation.

“The Justice Department and the company said Wednesday in a statement it will plead guilty to one misdemeanor charge of ‘misbranding,’ in which the company’s marketing led physicians to use Botox for unapproved uses. Those included the treatment of headache, pain, spasticity and cerebral palsy in children,” the Detroit Free Press reported. “Allegran said it will pay $375 million in connection with the plea, which includes the forfeiture of $25 million in assets. Additionally, the company will pay $225 million in civil fines — $210 million to the federal governments and the rest to several states — related to the investigation, although the company denies liability for the civil claims.”

According to the Free Press article, Allegran “ also struck an agreement with the Department of Health and Human Services’ Office of the Inspector General that requires the company to submit compliance reports, and to post on its website any payments to doctors, such as honoraria, travel or lodging.”

To read the Detroit Free Press article click here.

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