UPDATE 1-Bausch & Lomb's Ista pleads guilty over kickbacks

Fri May 24, 2013 4:19pm EDT
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* Ista said to offer kickbacks to doctors over cataract drug

* Xibrom drug said to be marketed for unapproved uses

* Settlement announced amid Bausch & Lomb merger talks

By Jonathan Stempel

May 24 (Reuters) - Ista Pharmaceuticals Inc pleaded guilty on Friday to charges it used kickbacks and improper marketing to boost sales of a drug meant to treat eye pain and agreed to pay $33.5 million to settle criminal and civil liability, the U.S. Department of Justice said.

The unit of eye care company Bausch & Lomb pleaded guilty to conspiracy to offer kickbacks to induce physicians to prescribe Xibrom, a drug meant to treat pain after cataract surgery, and conspiracy to promote that drug for unapproved uses, including after Lasik and glaucoma surgeries.

Ista agreed as part of a criminal settlement to a $16.63 million fine and an $1.85 million asset forfeiture. It also agreed to a $15 million civil settlement to resolve allegations that its marketing of Xibrom caused false claims to be submitted to government health care programs.

As part of the settlement, Ista will be barred from participating in Medicare and Medicaid, and Bausch & Lomb agreed to strengthen its compliance and ethics procedures.

"The fact that Ista offered doctors illegal inducements - such as a wine tasting, golf outings, and payments to attend what were in essence marketing sessions - makes the company's illegal conduct particularly deserving of the hefty penalty Ista has agreed to pay," U.S. Attorney William Hochul in Buffalo, New York said in a statement.   Continued...