Allergan: Selling the Injection and the Diagnosis

The Allergan Botox fraud settlement included a $225 million civil agreement over allegations that Allergan promoted uncovered uses and instructed doctors to use inappropriate diagnosis codes to get government programs to pay. The company allegedly helped sell the injection and the reason for making taxpayers pay for it. For someone inside pharmaceutical sales or reimbursement support, that connection is the heart of this case.

The Justice Department announced the civil settlement on September 1, 2010. This pharmaceutical fraud case concerned allegations running from 2001 through at least 2008. They reached beyond what sales representatives told doctors to what those doctors told the government when they billed for treatment.

What Is Considered Off-Label Promotion?

Off-label promotion means a manufacturer markets a drug for a use outside its approved labeling. Allergan’s civil settlement concerned promotion tied to claims for uncovered uses of Botox Therapeutic, along with allegedly misleading statements about safety and effectiveness, inappropriate diagnosis codes and inducements to inject more of the product.

By 2004, the Food and Drug Administration had approved Botox Therapeutic for strabismus, or crossed eyes; blepharospasm, involuntary eyelid muscle contraction; cervical dystonia, involuntary neck muscle contraction; and primary axillary hyperhidrosis, excessive underarm sweating. In this case, the government’s allegation turned on the gap between the use Allergan encouraged and the diagnosis used to secure payment.

Diagnosis Codes Made the Sales Pitch Payable

The government alleged that Allergan instructed doctors to bill uncovered Botox uses under inappropriate diagnosis codes to ensure payment. A promotion campaign could persuade a doctor to inject the drug. The coding instruction allegedly supplied the next step: a claim the government would pay.

The same company encouraging use of the drug was allegedly telling the practice how to describe that use to the payer. The clinical reason for an injection and the reason presented for reimbursement could diverge at the company’s direction.

The industry’s medically accepted indication rules explain why the use matters so much. For Medicaid, a covered use can rest on FDA approval or support in specified drug references called compendia. The Allergan civil allegation was that the promoted uses failed the applicable coverage requirements. The alleged coding instructions were a way to obtain payment anyway.

The programs named in the settlement included Medicare, Medicaid, TRICARE, the Federal Employees Health Benefit Program, Veterans Affairs and the Department of Labor’s workers’ compensation programs. Taxpayers were allegedly paying for injections that those programs did not cover under the actual indication.

Reimbursement Support Became Part of the Sales Operation

The Justice Department described an alleged sales campaign that used Allergan’s reimbursement operation to help doctors obtain payment for off-label injections. Its account included doubling the reimbursement team in 2003 and calling on doctors who typically treated patients with the conditions being promoted beyond the label.

The alleged campaign included workshops that taught doctors and their office staffs how to bill for off-label uses. Bringing the office staff into the room mattered. The alleged campaign reached the people handling reimbursement as well as the physician deciding whether to use the product.

Allergan allegedly audited doctors’ billing records to show them how much money they could make by injecting Botox. The manufacturer was using the practice’s own books to make the case for more injections, according to the department.

The Botox Reimbursement Hotline allegedly supplied a wide array of free, on-demand services for off-label uses. A sales visit, a billing workshop and continuing reimbursement assistance could all serve the same objective: making the next injection easier to sell and easier to bill. That is why an insider’s view of reimbursement support can be as important as knowledge of the sales pitch.

The department also described alleged efforts to lobby government healthcare programs to expand coverage for off-label uses. The department’s account thus described efforts both to change what programs covered and to help practices obtain payment for the uses being promoted.

Education and Payments Pointed Toward More Injections

The government alleged that Allergan provided inducements to doctors to inject more Botox. The alleged promotional operation included physician workshops and dinners focused on off-label uses, payments to doctors attending advisory boards promoting those uses, and an online neurotoxin education organization presented as independent.

The Justice Department alleged that the online organization was created to stimulate increased off-label use. The claimed independence and the manufacturer’s sales objective belonged to the same arrangement. For an employee who knew who directed the material, that relationship would be central to understanding what the education was designed to accomplish.

The Civil Settlement and the Whistleblower Reward

The civil agreement allocated $210,250,000 to the federal government and up to $14,750,000 to states choosing to participate.

The agreement resolved three qui tam cases brought by whistleblowers. Five whistleblowers were to receive a collective $37.8 million from the federal share.

A whistleblower case under the False Claims Act can pay the whistleblower 15% to 30% of what the government recovers.

What Allergan Had to Change

Allergan entered a five-year Corporate Integrity Agreement with the Department of Health and Human Services’ Office of Inspector General that required public disclosure of physician payments, including honoraria, travel and lodging.

What Evidence Is Needed to Prove Fraud?

In a case about promotion and diagnosis codes, we work with you to connect the manufacturer’s instructions to the claims sent to government healthcare programs. The Allergan allegations make those connections concrete through billing workshops, practice audits, reimbursement assistance and inducements to inject more.

For a pharmaceutical whistleblower, we connect training materials, billing audits, physician-payment records and educational materials to explain how the commercial message reached the claim.

The difference between an internal instruction and the routine record of a sales call appeared in a separate case involving Abbott’s TriCor. A whistleblower’s complaint alleged that the company told representatives to leave off-label discussions out of their call notes:

That allegation illustrates why the company’s standard sales records may tell only part of the story. Someone who received the training may understand a gap that a reader of the call notes would never see. In an Allergan-type case, we look for the connection between what the company instructed, what the practice did and what the payer was told.

What Whistleblower Cases Added

Whistleblower cases accounted for a growing share of federal pharmaceutical settlements during the period that included Allergan’s resolution. Public Citizen’s 2010 report, Rapidly Increasing Criminal and Civil Monetary Penalties Against the Pharmaceutical Industry: 1991 to 2010, found that qui tam cases accounted for 9% of federal settlement payouts from 1991 through 2000 and 67% from 2001 through 2010.

A paid claim shows what the government received. The person who knows the sales instructions, billing workshops or payment arrangements can help explain how that claim came to say what it did. Allergan’s case puts that connection at the center of the civil allegations.

You Know How the Claim Was Sold

If you saw a sales team supply the diagnosis-code instructions or use reimbursement support to drive more injections, speak to one of our whistleblower experts about how the claims were coded. We work with you to build your strongest pharmaceutical whistleblower case from that knowledge and bring in pharmaceutical fraud whistleblower lawyers who understand promotion, coding and government reimbursement. You have our judgment and advocacy alongside you throughout the case.