How Botox Misbranding Leads to Medicare FraudThe Food and Drug Administration approved Botox for two specific conditions. Once the FDA approves a drug for any use, however, doctors are free to prescribe it to treat all other conditions. This is called off-label use. Sometimes, as happened with Botox, a drug becomes far more popular for off-label uses than approved uses. The drug's maker naturally wants to make as much money as possible and certainly won't discourage off-label use. The problem: the drug maker cannot market or advertise the drug for anything other than the approved use.
Allergan agrees it made a few mistakes in marketing. So it pleaded guilty to this misbranding claim. It's paying a fine of $375 million for that. Allergan also has agreed to pay an addition $225 million to settle claims it violated the federal False Claims Act.
Here we see the law of unintended consequences in action. Medicare, Medicaid and other federal programs dished out a lot of insurance money to pay for Botox prescriptions. Allergan hyped Botox for off-label indications that were not medically accepted and not covered by federal health care programs. The insurance payments violated the False Claims Act. The original accusations of false claims were made in several whistleblower suits against Allergan.