Allergan’s subsidiaries Forest to pay $38M for bad marketing practices

Allergan’s indirect subsidiaries Forest Laboratories, LLS and Forest Pharmaceuticals, Inc. are about to pay $38 million for bad sales and marketing practices.

Forest has reached a civil resolution with the federal government, concluding a previously disclosed federal investigation involving three Forest products, Bystolic, Savella and Namenda, during the time period January 1, 2008 through December 31, 2011.

As Allergan stated in its press release issued on Thursday, Forest has agreed to enter into settlements with state Medicaid programs (the “Settling States”) in connection with the same investigation.  The settlement will also resolve a related qui tam litigation pending in the United States District Court for the Eastern District of Wisconsin, 12-CV-366.

Under the terms of the settlement agreement, Forest will pay a total of $38,000,000 to the federal government and any Settling States to resolve all civil claims.  The settlements will resolve claims stemming from instances in which Forest allegedly lacked adequate controls over payments made to physicians for conducting speaker programs.  Forest Laboratories, LLC previously recorded charges for the entire settlement amount in connection with the government’s investigation.

The agreement will not affect Allergan’s ongoing business with any customers, including the government, as the period in question is prior to the leadership of the Company under the current management team.

Jonathon Kellerman, Executive Vice President, Global Chief Compliance Officer said: “We have a strong Compliance organization that ensures that our policies and procedures are, and will remain, best-in-class and ensures that we continue to run our business in full compliance with all laws and regulations as well as the high ethical standards we have set for Allergan.”