A new wrinkle in Botox business
Botox maker Allergan Inc. received a subpoena for documents related to the anti-wrinkle injection. The company believes the subpoena relates to alleged off-label promotion of Botox to treat headaches. Jeff Tyler reports.
Patient get a Botox shot to her brow (Andreas Rentz/Getty Images)
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Tess Vigeland: Forgive me for this line, but there's a new wrinkle in the Botox business.
The Department of Justice is investigating how Allergan, the drug's parent company, promotes it. The Feds want to know if Allergan it touting Botox as a treatment for headaches -- a use which has not been approved by the FDA.
Marketplace's Jeff Tyler has more.
Jeff Tyler: Botox isn't just used for cosmetic touch-ups. Half of its annual sales come from therapeutic uses, treating things like uncontrollable blinking and muscle spasms. Allergan is currently testing Botox as a treatment for headaches.
Doctors can prescribe it for such "off-label" uses, but the company can't market the drug as a headache cure without FDA approval. The Justice Department wants to know if Allergan jumped the gun.
Spokeswoman Caroline Van Hove says it didn't:
Caroline Van Hove: It is our policy that our products are only promoted in a manner that is consistent with the FDA-approved labeling of our products.
Even if the Feds find otherwise, the fallout isn't expected to be major.
Jeff Viksjo is a stock analyst with Morningstar.
Jeff Viksjo: Any fine levied is likely to be manageable, given Allergan's size. It's an $18 billion company and taking away those off-label sales are going to be very small to Botox's overall sales total.
While off-label sales of Botox to treat headaches may be small, some observers say the drug depends on other off-label sales.
So says Peter Lurie with Public Citizen.
Peter Lurie: This is a drug that is surviving primarily by off-label uses.
For cosmetic use, the FDA has approved Botox only to fight wrinkles in that space between the eyes. Injecting Botox in some other part of the face is considered off-label.
Whether or not it's used according the instructions on the label, demand is strong. Last year, worldwide sales of Botox exceeded a billion dollars.
I'm Jeff Tyler for Marketplace.
