Allergan inks $13M settlement in whistleblower marketing suit

After years of battling in court, Allergan agreed to hand over $13 million to settle kickbacks allegations with the U.S. and 19 states.

For years, whistleblowers and their attorneys have been battling with Allergan over claims the company illegally promoted eye drugs by providing valuable consulting and other services to doctors. Their efforts proved worthwhile as the company agreed (PDF) to hand over $13 million to settle kickback allegations with the U.S. and 19 states.

Filed in 2009, the lawsuit alleged that Allergan representatives targeted doctors around the country and pushed Restasis and other eye drugs for off-label uses through an “Allergan Access” membership program for doctors. Two Philadelphia-area ophthalmologists brought the case against Allergan and will receive a share of the payment under the False Claims Act.

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To induce doctors to write more scripts, Allergan offered business advisory services plus membership in an “Allergan Access” website that provided financial analysis, human resource tools, continuing education resources and more, the suit said. The company also offered payments for doctor attendance at meetings and dinners, according to the lawsuit.

Medicare, Medicaid and other tax-funded health programs have “been caused to pay false or fraudulent claims for reimbursement” of Allergan drugs due to the scheme, the whistleblowers said in their complaint.

An Allergan spokesperson declined to comment on the settlement.

According to the suit, the Philadelphia doctors attended an Allergan “Dry Eye Dinner” in 2009, where a senior business advisor for the pharma company told 16 to 20 eye care professionals that aggressively treating dry eye patients would result in significant increases in annual revenues for their practices. Further, the company encouraged doctors to market their practices as a "Dry Eye Center of Excellence" with Allergan’s assistance, the complaint said.

Allergan ran its program from approximately 2002, according to the whistleblower suit, helping to generate hundreds of millions of dollars in sales for its eye medications. Restasis was the largest, reaching $523 million in sales by 2009.

RELATED: Novo Nordisk reaches whistleblower settlement in 'white-coat' sales scheme lawsuit

The case resembles a whistleblower suit brought against Novo Nordisk for a “white-coat” sales scheme, where Novo Nordisk allegedly contracted with a company to hire certified diabetes educators that provided thousands of dollars worth of educational programs and materials at physician practices. The idea was to induce doctors to write more Novo scripts, according to that lawsuit.

In that case, Novo reached a settlement to put to rest “certain claims related to this investigation,” a spokesperson said at the time. The drugmaker denied the allegations.

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