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Ista Pharmaceuticals To Pay $33.5 Million To Settle Claims Company Paid Doctors To Push Drug

Ista Pharmaceuticals SettlementHuffington Post – by Jonathan Stempel, Reuters

Ista Pharmaceuticals Inc pleaded guilty on Friday to charges it used kickbacks and improper marketing to boost sales of a drug meant to treat eye pain and agreed to pay $33.5 million to settle criminal and civil liability, the U.S. Department of Justice said.

The unit of eye care company Bausch & Lomb pleaded guilty to conspiracy to offer kickbacks to induce physicians to prescribe Xibrom, a drug meant to treat pain after cataract surgery, and conspiracy to promote that drug for unapproved uses, including after Lasik and glaucoma surgeries.  

Ista agreed as part of a criminal settlement to a $16.63 million fine and an $1.85 million asset forfeiture. It also agreed to a $15 million civil settlement to resolve allegations that its marketing of Xibrom caused false claims to be submitted to government health care programs.

As part of the settlement, Ista will be barred from participating in Medicare and Medicaid, and Bausch & Lomb agreed to strengthen its compliance and ethics procedures.

“The fact that Ista offered doctors illegal inducements – such as a wine tasting, golf outings, and payments to attend what were in essence marketing sessions – makes the company’s illegal conduct particularly deserving of the hefty penalty Ista has agreed to pay,” U.S. Attorney William Hochul in Buffalo, New York said in a statement.

Ista pleaded guilty before U.S. District Judge Richard Arcara in Buffalo.

Bausch & Lomb, which is based in Rochester, New York, said it was pleased to settle the matter, which involved conduct between January 2006 and March 2011, and that it knew of the government probe well before it purchased Ista.

That purchase closed in June 2012 and Bausch and Lomb plans to wind down the Ista corporate entity by year end.

The civil settlement resolves claims filed under the False Claims Act, which lets private parties known as whistleblowers sue on the U.S. government’s behalf and share in recoveries.

Keith Schenker, a whistleblower who had been an Ista sales representative in Brooklyn and Queens counties in New York, will receive $2.5 million of the settlement amount, according to the Justice Department and court papers.

Canada’s Valeant Pharmaceuticals International Inc is nearing an agreement to buy Bausch & Lomb from Warburg Pincus LLC for about $9 billion, a person familiar with the matter said on Friday. News about that transaction surfaced at about the same time that the settlement was announced.

The criminal case is U.S. v. Ista Pharmaceuticals Inc, U.S. District Court, Western District of New York, No. 13-cr-00099. The whistleblower case, which was unsealed on Friday, is U.S. ex rel. Schenker v. Ista Pharmaceuticals in the same court, No. 07-00372.

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5 Responses to Ista Pharmaceuticals To Pay $33.5 Million To Settle Claims Company Paid Doctors To Push Drug

  1. diggerdan says:

    Hefty penalties, SH*T, pharma makes that much money easily every day. That is no penality for those guys. they will just make up for it in other ways like other false marketing ad.s or inferior/false ingredients.

  2. Bullwinkle says:

    It is just part of the cost of doing business.

  3. Old Timer says:

    This is the same old same old. It is always a fine instead of jail for the corporate elite. But have a white rapper say something that is not liked and they want to give him 20 years in jail. I mentioned white rapper because there are black rappers who use similar lyrics but I do not see them being arrested.

    • Bullwinkle says:

      The Corporation was on trial, not any of the executives.
      The Rapper admitted to being the Corporate Fiction name spelled
      in all CAPITOL letters. Even a tractor can be charged with a crime. The farmer will not be involved or charged unless he admits that it is his tractor. This is Vatican/Roman law which is at the root of what we know as Admiralty Law.. When we get our country back the people must abandon Vatican/Roman law or we will be right back where we are now within a generation.

  4. # 1 NWO Hatr says:

    Obviously they failed to grease the proper (so-called) ‘government’ officials’ palms.

    And got caught ‘red-handed’. (yes, intended)

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