Allergan Q2: How Much Does a DOJ Subpoena Cost? $7.4M
Allergan spent $7.4 million responding to a U.S. Department of Justice subpoena in an investigation of the off-label use of Botox for migraines. Allergan said at the time:
In its Q2 2009 earnings statement, Allergan tucked the $7.4 million charge for legal costs on that subpoena into a footnote on its income statement:The subpoena broadly requests documents regarding promotional, educational and other activities relating to BOTOX.
Allergan's current understanding is that the inquiry involves questions regarding alleged off label promotion relating to the use of BOTOX for the treatment of headache. While Allergan is currently in phase III clinical studies investigating the use of BOTOX ® for the treatment of headache, this is not an FDA-approved use.
External costs of approximately $7.4 million associated with responding to the U.S. Department of Justice (DOJ) subpoena announced in a company press release on March 3, 2008Allergan CEO David Pyott was asked about the investigation on his conference call and gave this answer:
Obviously this is sort of a long painful process and clearly we cooperate very fully. We produced a mountain of documents in return of all their requirements for information. So this is one where it will just grind on and, obviously, you've seen us spending large sums of money on the DOJ investigation. So beyond that, I really can't comment.Ironically -- or possibly not! -- while the DOJ was investigating whether Allergan was illegally touting Botox for headaches, the company said in its Q2 release that it was officially asking the FDA to approve the wrinkle juice for just that:
Allergan presented to the FDA the results from its two Phase III studies on the use of BOTOX® for the prophylactic treatment of headache in adults suffering from chronic migraine and completed an end-of-Phase III meeting and discussions with the FDA.
Incorporating feedback from the FDA, Allergan intends to file its sBLA with the FDA for the use of BOTOX® in chronic migraine by the end of the third quarter of 2009.Allergan did not say how the subpoena turned out, or whether the off-label probe was over. Which potentially leaves company in the interesting position of arguing to the DOJ that it absolutely did not want Botox used for migraines, while arguing to the FDA that it absolutely does.
- See previous coverage of Allergan:
- The Sanofi-Allergan-Amgen Deal Worst-Case Scenario
- Could Allergan's Reliance on Stars Hurt It in War With Medicis?
- Allergan's Q1 Nightmare: Profit Down; Black Box Warning on Botox Vindicates an Old Nemesis; "It's All Medicis' Fault!"
- Allergan Could Lose a Third of Botox Market With FDA's Approval of Medicis' Dysport
- Medicis Employees Should Look Anxiously at Allergan Layoffs
- Medicis Squeezed in Vanity Pharma Death Match vs. Allergan and J&J
- Medicis' Accounting Error Puts Spotlight on Solodyn Weakness; Allergan Rejoices
- The Allergan-Medicis Vanity Pharma Death Match Is About to Get Complicated