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ISTA To Pay $34 Mln To Resolve Charges Against Misbranding Xibrom

5/25/2013 3:27 AM ET

Global eye health company, Bausch & Lomb Friday said that its subsidiary ISTA Pharmaceuticals, Inc.,(ISTA: Quote) has agreed to pay about $34 million to resolve charges against it for introducing its anti-inflammatory Xibrom for unauthorized uses in an aim to expand sales. Bausch & Lomb which was aware of the federal issues against ISTA, acquired the latter during June last year.

The government has acknowledged that it has no knowledge that Bausch & Lomb, any current director or officer of Bausch & Lomb, or any current director or officer of Ista was party to any conduct related to this case, the eye care company said in a statement. Carrying charges of illegally introducing a misbranded drug, Xibrom, into interstate commerce, ISTA also pled guilty in the Western District of New York to have willingly paid remuneration to the physicians in an attemept to make them prescribe Xibrom, in violation of the federal Anti-Kickback Statute.

Between 2005 and 2010, some ISTA employees promoted Xibrom for unapproved new uses, including the use of Xibrom after Lasik and glaucoma surgeries, and for the treatment and prevention of cystoid macular edema. The drug was approved by the FDA to treatr pain and inflammation following cataract surgery. ISTA also pled guilty to offering free products, a golf outing, a wine-tasting event, paid consulting gigs and honoraria to doctors, in an effort to induce them to prescribe Xibrom.

Pursuant to the plea agreement, ISTA will pay a total of $18.5 million, including a criminal fine of $16.1 million for the conspiracy to introduce misbranded Xibrom into interstate commerce, $500,000 for the conspiracy to violate the Anti-Kickback Statute, and $1.85 million in asset forfeiture associated with the misbranding charge. ISTA through a civil settlement agreement agreed to pay $15 million to the federal government and states to resolve claims arising from its marketing of Xibrom, which caused false claims to be submitted to government health care programs. ISTA will further be prohibited from participating in federal healthcare programs such as Medicare and Medicaid.

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by RTT Staff Writer

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