Ista Pharmaceuticals Inc. will pay $33.5 million to settle criminal and civil liability, after the company pleaded guilty on Friday to charges it used kickbacks and improper marketing procedures to promote it’s eye drug Xibrom.
After being acquired last year by Bausch & Lomb, the company admitted to using kickbacks to entice physicians to prescribe the anti-inflammatory drug Xibrom, which the Food and Drug Administration approved for use after cataract surgery. Ista pleaded guilty to conspiracy to promote Xibrom for uappproved uses like after glaucoma or Lasik surgeries.
Ista is now forced from participating in Medicare and Medicaid. It will also pay a $16.63 million fine and a $1.85 million forfeiture in the criminal settlement, and another $15 million civil settlement to resolve allegations that it made false claims with government health care programs.
The probe into Ista’s practices involved the company’s condition from January 2006 to March 2011, long before it was acquired by Bausch & Lomb in June 2012.
Baush & Lomb agreed to tighten procedures on compliance and ethics.
The civil suit was filed by a private party. Whistleblower Keith Schenker. Schenker was an Ista sales representative in Brooklyn and Queens. Filed under the False Claims Act, Schenker sued on behalf of the U.S. government and shared in recoveries. He is set to receive $2.5 million of the settlement.
Around the same time the settlement was announced, a person familiar with the matter reported Canada’s Valeant Pharmaceuticals International Inc. plans to buy Bausch & Lomb from Warburg Pincus, LLC, for $9 billion.