Inspire Pharmaceuticals' AzaSite is approved to treat bacterial conjunctivitis, more commonly known as pink eye. But that's not all the company hawked it for when it was part of Merck & Co. ($MRK), the U.S. Justice Department says.
The New Jersey pharma giant has agreed to fork over $5.9 million to wrap up the Justice Department claims, which say Inspire--acquired by Merck in 2011 and later sold--promoted AzaSite off-label for uses including blepharitis, another eye condition. Because of that marketing, doctors prescribed the med for off-label uses, and federal healthcare programs shelled out millions of dollars in false claims, allegations say.
For Merck's part, it's glad to put the case--initiated in 2010 by a purported whistleblower--"behind us," spokeswoman Lainie Keller told Reuters in a statement. That lawsuit concerns activities that occurred before Merck bought Inspire, now a part of Illinois' Akorn Pharmaceuticals ($AKRX), she added.
It's not uncharted territory for Merck, which in 2011 handed over $950 million to resolve allegations over anti-inflammatory blockbuster Vioxx. That settlement included a $321.6 million criminal fine--for a misdemeanor misbranding violation--and a $628.4 million payment to wrap up civil claims, including those filed by 40 state attorneys general.
The AzaSite settlement is just a fraction of that total, but that's the way prosecutors have been moving as of late. They've focused on much smaller cases--and smaller drugmakers--as the Justice Department ramps up enforcement--in addition to the larger ones, of course.
That's how Shire ($SHPG) recently found itself agreeing to pay $56.5 million to put aside claims that it overstepped its bounds while promoting several ADHD meds, including top sellers Adderall XR and Vyvanse. And in April, Pacira Pharmaceuticals ($PCRX) received a subpoena from federal prosecutors demanding information about its marketing for post-surgery pain treatment Exparel.
Special Report: Pharma's top 11 marketing settlements - Merck - Vioxx