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Bausch & Lomb Unit Pays $33.5 Million in Misbranding Case

Ista Pharmaceuticals Inc., a unit of Bausch & Lomb Inc. that makes medicine to treat eye ailments, agreed to pay $33.5 million to resolve federal claims of misbranding and paying kickbacks related to the drug Xibrom.

The company today also pleaded guilty to felony charges as part of the settlement, the U.S. Justice Department said in a statement. Irvine, California-based Ista was sued in 2007 and some documents were unsealed today by U.S. District Judge Richard Arcara in Buffalo, New York, according to court records.

Xibrom, approved by the U.S. Food and Drug Administration for treating pain and inflammation after eye-cataract surgery, was being promoted by Ista for non-approved uses related to laser eye surgery and glaucoma treatments, the U.S. said.

“In addition, ISTA pled guilty to a conspiracy to knowingly and willfully offering or paying remuneration to physicians in order to induce those physicians to prescribe Xibrom, in violation of the federal Anti-Kickback Statute,” according to the government’s statement.

The agreement resolves civil and criminal claims against the company, the U.S. said. Rochester, New York-based Bausch & Lomb said the actions occurred “well before” it acquired Ista in 2012.

“Bausch & Lomb is committed to earning trust in everything that we do and is pleased to have resolved this pre-acquisition issue,” Bob Bailey, a Bausch & Lomb spokesman, said in a statement.

Valeant Pharmaceuticals International Inc. (VRX), Canada’s largest drugmaker, is close to acquiring Bausch & Lomb from owner Warburg Pincus LLC for about $9 billion, according to a person familiar with the negotiations.

The civil case is U.S. v. Ista Pharmaceuticals, 07-cv-00372, and the criminal case is U.S. v. Ista Pharmaceuticals, 13-cr-00099, U.S. District Court, Western District of New York (Buffalo).

To contact the reporter on this story: Phil Milford at pmilford@bloomberg.net.

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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