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ISTA Pharmaceuticals, Inc. Pays $15 Million In Settlement Of Off-Label Marketing Claims


MADISON — Attorney General J.B. Van Hollen announced today that Wisconsin joined with other states and the federal government to reach an agreement with ISTA Pharmaceuticals, Inc. (“ISTA”) to settle allegations that ISTA marketed its ophthalmic drug Xibrom® for uses that were not approved by the United States Food and Drug Administration (FDA), and paid inducements to doctors to write Xibrom® prescriptions between January 2006 and March 2011.


ISTA paid the states and federal government a total of $15,000,000 in civil damages to compensate Medicaid, Medicare, and other federal health care programs for harm suffered as a result of its conduct. The state Medicaid programs received over $740,000. The federal damages are significantly higher because the vast majority of Xibrom® prescriptions were for conditions primarily suffered by older Medicare patients, such as cataracts and glaucoma.


Wisconsin received $8,202.54 as the state share of $20,814.43 attributable to Wisconsin Medicaid. Medicaid is a health insurance program for the needy and disabled jointly funded by the state and federal governments.


To resolve concurrent criminal charges, ISTA entered into a plea agreement with the federal government in which it pled guilty in federal court on May 24, 2013 to conspiracy to introduce a misbranded drug into interstate commerce and conspiracy to pay illegal remuneration in violation of the Federal Anti-Kickback Statute. ISTA paid criminal fines and forfeitures of approximately $18.5 million in the criminal case in addition to the civil settlement.


ISTA was acquired by Bausch & Lomb in June, 2012. Bausch & Lomb incorporated ISTA’s products into its own and wound down ISTA’s operations. The ISTA conduct alleged in this settlement happened between 2006 and 2011 and predated the acquisition by Bausch & Lomb.


Xibrom® had FDA approval only for use following cataract surgery, for up to 14 days. The government entities alleged that ISTA marketed the drug for a wider range of uses including treatment and prevention of cystoid macular edema, treatment of glaucoma and inflammation other than postoperative inflammation, and treatment of pain and inflammation associated with non-cataract eye surgery. Pharmaceutical manufacturers are generally not allowed to market their drugs for uses that are not approved by the FDA, and federally-funded health care plans, including Medicare and Medicaid, generally do not pay for prescriptions for such uses.


Further, ISTA allegedly offered and paid illegal remuneration to certain ophthalmologists and optometrists to induce them to prescribe Xibrom®, in violation of the Federal Anti-Kickback Statute. This remuneration allegedly included monetary payment, paid consulting or speaker arrangements, and honoraria for participation in advisory meetings which were intended to be marketing opportunities.


This settlement is based on whistleblower actions filed in the United States District Court for the Western District of New York under state and federal false claims statutes.