Allergan Settles Toxin-Export Allegations

IRVINE —  Allergan Inc. agreed to pay $824,000 to settle Commerce Department allegations that it improperly exported medicine made from a lethal toxin that can be used in biological warfare, the federal agency said Monday.

The penalty is the largest since international controls on biological exports became law six years ago, the agency said.

The Commerce Department alleged that it found 412 instances in which the Irvine drug company shipped botulinum toxin--a potentially deadly substance generally associated with food poisoning--without a special license.

Iran and several other Mideast countries received the product--called Botox or Oculinum--that Allergan sells as an injectable muscle relaxant. The alleged shipments occurred from July 1992 through October 1993.

F. Amanda Debusk, assistant secretary for export enforcement, said the Commerce Department doesn’t know whether any of the product fell into the wrong hands. “There is no way we can say with absolute certainty,” she said.

Agency personnel tracked packages sold in Japan, the United Arab Emirates, Lebanon and Jordan and found no evidence that any had fallen into the wrong hands, officials said.

But they expressed concern that packages shipped to any country could be sent on to unfriendly nations.

The agency alleged that Allergan failed to abide by controls on biological agents set by the 30-nation Australia Group, whose members work to stem proliferation of biological and chemical weapons.

All members require special licenses to export biological agents with both legitimate civilian uses and possible uses in warfare.

The company settled with the Commerce Department to avoid costly litigation, Allergan spokesman Jeff D’Eliscu said.

Allergan also has obtained the required licenses and continues to ship the product to nations that are members of the Australia group, he said.

The company believes the product, a medicine, should be exempt from export controls, D’Eliscu said. The active ingredient in Botox--botulism toxin--is in the form of a vacuum-dried powder that can’t be made into a weapon, he said. Physicians mix it with a saline solution.

The product, which is injected into a cramping muscle, is approved for treatment of eyes and eyelids in the U.S. and is also sold elsewhere for treating neck and shoulder muscles.

The company’s sales of the product for the first nine months last year totaled $64.8 million, up 35% from the same period the year before.

The Commerce Department began an investigation in 1992 after Rep. Tom Lantos (D-San Mateo) requested an inquiry into questionable shipments to Iran.

A spokesman for Lantos said the congressman intends to evaluate whether the Allergan penalty is severe enough. The agency has the power to fine violators at a maximum $10,000 per export shipment--and can revoke export licenses if it chooses.

The settlement surpasses a $480,000 penalty that St. Louis-based Sigma Chemical Co. agreed to pay in July 1996 for alleged violations of export controls on biologicals.

The shipments in Sigma’s case involved several toxins.

About 2,500 companies across the country, including drug makers, research firms, hospitals and medical offices, are sources of controlled biological agents that can be used as medicines or weapons, the agency said.