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Allergan unit to plead guilty to health care fraud, pay $125 million


(Reuters) — Warner Chilcott U.S. Sales L.L.C., now part of Botox maker Allergan P.L.C., agreed to plead guilty to felony health care fraud and pay $125 million to resolve U.S. charges that it paid kickbacks to doctors to induce them to prescribe several of its drugs.

The U.S. Department of Justice, which announced the settlement, also said former Warner Chilcott President W. Carl Reichel was arrested in Boston on Thursday and charged with one count of conspiring to pay kickbacks.

At least four other people have pleaded guilty or been charged over Warner Chilcott’s activities, the department said.

The settlement resolves charges that from 2009 to 2013, Warner Chilcott illegally marketed seven drugs, including Asacol to treat ulcerative colitis, and Actonel and Atelvia to treat post-menopausal osteoporosis.

Investigators said this marketing included the making of payments or offering of perks such as expensive restaurant meals to persuade doctors to prescribe the drugs.

Warner Chilcott agreed to pay a $22.94 million criminal fine and admit to paying kickbacks, improperly inducing insurers to pay for Atelvia prescriptions, and making unsubstantiated claims about Actonel.

It also agreed to pay $102.06 million to the U.S. government and states to resolve civil charges that it caused false claims to be submitted to government healthcare programs.

Allergan is based in Dublin, Ireland, and has offices in Parsippany, New Jersey. It said it cooperated with the U.S. probe and had previously set aside funds for the accord.

CEO Brent Saunders said in a statement that Allergan is committed to operating “in full compliance with the regulations and high ethical standards we have set.”

Mr. Reichel, 57, of Chester, New Jersey, pleaded not guilty at a hearing before U.S. Magistrate Judge Jennifer Boal in Boston, and was released without bail, said his lawyer Joe Savage.

“The charges brought today by the U.S. Attorney’s office are false,” said Mr. Savage, a partner at Goodwin Procter. “For more than 30 years in the pharmaceutical industry, Carl Reichel worked hard and did the right thing, and these baseless claims can’t change that.”

Whistleblowers who sued Warner Chilcott under the federal False Claims Act in 2011 will receive $22.9 million from the civil settlement, the Justice Department said.

Warner Chilcott was acquired by Actavis P.L.C. in October 2013. Actavis bought Allergan in March 2015 and took its name.

Also on Thursday, Allergan confirmed that it is in preliminary talks to merge with drugmaker Pfizer Inc.

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