After Allergan was whacked with a $600 million fine by the federal government for “misbranding” Botox (among other things), I was waiting for a welter of outrage from the high-profile aesthetic products manufacturer. That fine is not just chump change. No such retort has been forthcoming, which should have come the same day or shortly thereafter. After all, Allergan recently sued the FDA over its First Amendment right to market its drugs for unapproved uses. Oops! Lawsuit dropped… it was part of the “deal” that resulted in the $600M fine. But, wait. Allergan has also been slapped by the FDA over more misleading claims, this time regarding Latisse, the eyelash-growing drug that wowed the industry last year.
Thank goodness John Mack, who blogs at www.pharmamkting.blogspot.com and runs the popular Pharma Marketing Network, tries to put the FDA-Allergan conundrum in perspective. “Reasonable” $600 MILLION Fine for Misbranding BOTOX: I Guess Allergan’s Suit Against FDA Paid Off!
Considering that Eli Lilly paid $1.41 billion to settle charges that it had improperly marketed Zyprexa for elderly patients with dementia and that Pfizer paid $2.3 billion to settle charges that it had illegally marketed the painkiller Bextra, the $600 million Allergan has to pay seems “reasonable,” which is exactly how Larry Biegelsen, an analyst at Wells Fargo Securities in New York, described it: “The $600 million settlement amount appears reasonable based on industry standards.”
Why such a “reasonable” settlement for a drug company that, IMHO, is an unethical marketer and the the drug industry poster boy for off-label promotion? Allergan, for example, has refused to abide by PhRMA’s DTC Guidelines as well as PhRMA’s Guidelines for Interactions with Healthcare Professionals (see “Allergan Doesn’t Comply with PhRMA Guidelines, Wins Kudos Anyway“). Allergan has also been cited by the FDA for other violations such as a misleading Latisse Web site (see “FDA Reads My Blog: Declares Latisse Web Site Misleading“).
You must read a bit further down in the media articles about this to learn that Allergan “is required as part of the agreement to drop the lawsuit it filed against the FDA in October challenging a government rule that prohibits marketing drugs for unapproved uses.”
There’s a lot to ponder when reading that statement. I ponder, for example, whether Allergan got off much easier because it agreed to drop its suit? Which was probably frivolous to begin with!
Ben Comer and Matthew Arnold, writing in Medical Marketing & Media, elaborate on the demise of the First Amendment lawsuit and the exact nature of Allergan’s transgressions. Allergan drops FDA lawsuit as part of off-label settlement:
The lawsuit, which challenged current FDA policy on the distribution of truthful information about a product, off-label or no, raised eyebrows across the industry. “With this lawsuit, we sought to gain better clarity regarding the rights of prescription drug companies to proactively share truthful scientific and medical information with the medical community, to assist physicians in evaluating the risks and benefits if they choose to use Botox off-label to treat certain forms of spasticity,” said Caroline Van Hove, an Allergan spokesperson, in an email.
As part of the Risk Evaluation and Mitigation Strategies (REMS) for Botox, Allergan is required to provide information about the safe use of its product, and that means engaging in off-label discussions, since Botox is widely used off-label, the company argued in a complaint filed last year. “It’s disappointing that the court was not afforded an opportunity to hear and rule on these important First Amendment issues,” said Van Hove. “The government made dismissal…a mandatory condition of our global settlement.”
In the past, FDA’s primary response to issues regarding the provision of off-label information, according to John Kamp, executive director of the Coalition for Healthcare Communication, goes something like this: If a drug works for an off-label use, and especially if it has become the standard of care for that use, why not do the clinical work and get the indication? “The trouble is that initiating new clinical trials for a new indication doesn’t always make good business sense,” said Kamp. “If a drug is getting close to the end of its exclusivity, at the end of the day, the cost of clinical testing outweighs any future sales that may come from a new indication.”
As part of the settlement, Allergan pleaded guilty to marketing Botox Therapeutic (not Botox Cosmetic, the wrinkle fix) for unapproved conditions including headache, pain, spasticity and juvenile cerebral palsy. Among other things, the government said Allergan “exploited its on-label cervical dystonia indication to grow off-label pain and headache sales” through a 2003 initiative developed as a “rescue strategy” meant to safeguard against poor clinical trials performance for those indications. “As part of this initiative, Allergan claimed that cervical dystonia was ‘underdiagnosed’ and that doctors could diagnose cervical dystonia based on headache and pain symptoms, even when the doctor ‘doesn’t see any cervical dystonia,’” said DOJ.
Ethan Smth, writing in Metalstorm, is more sympathetic to Allergan’s woes and makes good points about how firms should manage their relationship with the federal authorities:
He points to “the proactive steps that Allergan has taken to address not only this specific instance but to implement go-forward controls and systems to enhance transparency, better enforce compliant business practices, and ensure they are prepared for future regulatory change. In addition to developing a formal compliance program subject to regular reviews, Allergan “further enhanced its compliance program by developing additional comprehensive policies and procedures, supported by significant technology investments, including its state-of-the-art Business Execution Automated Compliance Navigator (BEACON) compliance system.” This seemingly minor, yet crucial omission in the media coverage of this event should not go overlooked by industry peers.”
Marketwatch published one of the few truly neutral news reports on the settlement, which includes details about new compliance mechnaisms that Allergan must implement as part of the deal:
As part of its global settlement, Allergan has entered into a Corporate Integrity Agreement (CIA) with the Office of Inspector General of the U.S. Department of Health and Human Services. Under the CIA, Allergan will maintain its current compliance program and undertake a series of compliance-related obligations, including additional monitoring, maintenance of specific written standards, auditing, training, education, reporting and disclosure, for five years. The CIA also provides for an independent third-party review organization to assess and report on Allergan’s compliance program.
“This settlement is in the best interest of our stockholders as it resolves all matters at issue in the investigation, avoids substantial costs of litigation, as well as the substantial risks to Allergan associated with Government enforcement action in these matters, and permits us to focus our time and resources on productively developing new treatments for patients and the medical community,” said Douglas S. Ingram, Allergan’s Executive Vice President.
Ultimately, Allergan desires to move on and put this event behind it. I can’t think of a single private corporation that wants the public to know any details of its internal workings and possible ethics violations. Nonetheless, in my opinion Allergan’s status as a “rogue company” now seems set in stone. Its large staff of PR and marketing folks — who could come out swinging and defuse the growing list of charges — are jaw-droppingly quiet. This is Corporate Proaganda 101, to keep quiet when the company braintrust has been implicated as liars and lawbreakers, called to the mat and forced into submission by The Man. Corporate propaganda being what it is, my guess us that an effort will be made to keep this dreadful news out of the media outlets that directly face its current and potential customers.
As John Mack points out, “Part of the agreement with the Justice Department, Allergan also will be required to publish information about its payments to doctors. I am not anticipating that Allergan’s physician payment information will be easy to analyze considering that much more ethical drug companies have failed to be transparent in this regard.”
Mack has a point. What if Allergan subscribes to that well-documented standard of corporate behavior in America that demands secrecy, dishonesty, and deception? Example of how this works in the real world: Employees of rogue firms that do have the information and insight to interpret the ethical failings of their employer are told to keep their mouths shut. They are subsequently saddled with the most obvious and transparent cliche that corporate America can perpetrate — to respond to internal and external inquiries with, “It’s just business as usual.”