Justice Department probes Bausch Health over marketing for dermatology drugs
Bausch Health is being investigated by U.S. authorities in connection with marketing of four medicines used to treat different skin conditions, according to an internal document reviewed by STAT.
The Department of Justice sent a civil investigative demand last year to the company seeking information about various activities in which the medicines may have been promoted for uses not approved by regulators. The inquiry is focused on three drugs used to treat plaque psoriasis — Bryhali, Siliq, and Duobrii – and a fungal treatment called Jublia, the document stated.
Specifically, the Justice Department is interested in any financial assistance that may have been provided to Medicare patients who were prescribed Siliq, contracts or other documents in connection with compensation paid to physicians for helping to promote all four drugs through speaking and consulting work, and information concerning compliance with a regulatory safety and education program for Siliq.
We asked Bausch Health for comment; the company said it had “nothing to add.”
The extensive interest shown in the marketing practices for these drugs was noted in a June 14, 2021, memo, known as a legal hold, which the Bausch legal team circulated to employees. The memo asked employees to retain any documents relating to the matters raised by the Justice Department in its civil investigative demand.
A civil investigative demand is a common tool used by federal agencies to obtain information without having to go to court and is often issued as a prelude to a lawsuit. The Justice Department declined to confirm, deny, or otherwise comment on whether an investigation was underway. There was no mention of a Justice Department probe in recent Bausch filings with the Securities and Exchange Commission. It is not clear when the civil investigative demand was filed, but such probes are typically disclosed in SEC filings.
More than a dozen years ago, the Justice Department investigated numerous pharmaceutical companies for marketing medicines that were not approved for certain uses. Nearly every large drug maker was fined for such practices. More recently, federal authorities have fined a growing number of drug companies for improperly arranging for financial assistance to Medicare patients.
The inquiry occurs as Bausch struggles to grow its dermatology business, which has been hurt by generic competition. Last year, the dermatology unit experienced a 15% drop in profits and sales rose just 3% over the previous year. Overall, dermatology products accounted for just 10% of companywide sales in 2021. Of five distinct business units, the largest of which is eye care, the dermatology unit has lagged the most.
One of the dermatology medicines, however, may become a so-called growth driver, according to Cowen analyst Ken Cacciatore. He cited Dubroii, a topical cream used for treating plaque psoriasis. However, the product has also drawn attention from the Food and Drug Administration, which recently scolded Bausch for overlooking serious health risks in Dubroii video and web page promotions.
Bausch Health is being investigated by U.S. authorities in connection with marketing of four medicines used to treat different skin conditions, according to an internal document reviewed by STAT.
The Department of Justice sent a civil investigative demand last year to the company seeking information about various activities in which the medicines may have been promoted for uses not approved by regulators. The inquiry is focused on three drugs used to treat plaque psoriasis — Bryhali, Siliq, and Duobrii – and a fungal treatment called Jublia, the document stated.
Specifically, the Justice Department is interested in any financial assistance that may have been provided to Medicare patients who were prescribed Siliq, contracts or other documents in connection with compensation paid to physicians for helping to promote all four drugs through speaking and consulting work, and information concerning compliance with a regulatory safety and education program for Siliq.
We asked Bausch Health for comment; the company said it had “nothing to add.”
The extensive interest shown in the marketing practices for these drugs was noted in a June 14, 2021, memo, known as a legal hold, which the Bausch legal team circulated to employees. The memo asked employees to retain any documents relating to the matters raised by the Justice Department in its civil investigative demand.
A civil investigative demand is a common tool used by federal agencies to obtain information without having to go to court and is often issued as a prelude to a lawsuit. The Justice Department declined to confirm, deny, or otherwise comment on whether an investigation was underway. There was no mention of a Justice Department probe in recent Bausch filings with the Securities and Exchange Commission. It is not clear when the civil investigative demand was filed, but such probes are typically disclosed in SEC filings.
More than a dozen years ago, the Justice Department investigated numerous pharmaceutical companies for marketing medicines that were not approved for certain uses. Nearly every large drug maker was fined for such practices. More recently, federal authorities have fined a growing number of drug companies for improperly arranging for financial assistance to Medicare patients.
The inquiry occurs as Bausch struggles to grow its dermatology business, which has been hurt by generic competition. Last year, the dermatology unit experienced a 15% drop in profits and sales rose just 3% over the previous year. Overall, dermatology products accounted for just 10% of companywide sales in 2021. Of five distinct business units, the largest of which is eye care, the dermatology unit has lagged the most.
One of the dermatology medicines, however, may become a so-called growth driver, according to Cowen analyst Ken Cacciatore. He cited Dubroii, a topical cream used for treating plaque psoriasis. However, the product has also drawn attention from the Food and Drug Administration, which recently scolded Bausch for overlooking serious health risks in Dubroii video and web page promotions.