The drug was approved by the Food and Drug Administration to treat pain and inflammation after cataract surgery.
However, between 2005 and 2010 some company employees promoted the drug for unapproved purposes, such as after other eye surgeries and to prevent swelling of the retina. Employees gave physicians sheets instructing how the drug could be used for those purposes.
Company management also colluded with employees to conceal the illegal activity.
Additionally, ISTA admits that it gave doctors the another of its drugs for free, took them golfing and to wine tasting events to get them to refer Xibrom to patients.
The actions are violations of the Federal Anti-Kickback Statute and the Food, Drug and Cosmetic Act.
"Today's resolution sends a clear message that pharmaceutical companies cannot put profit ahead of people, by disregarding laws designed to protect the health of the American public," said U.S. Attorney William Hochul Jr. in a statement announcing the plea.
As part of the plea and a civil settlement, the company will pay $33.5 million to the federal government and states.
In addition, ISTA's parent company, Bausch + Lomb, is establishing an ethics program to prevent similar violations from occurring in the future, and the federal government will no longer reimburse the company's drugs under Medicare and Medicaid.
“Bausch + Lomb is committed to earning trust in everything that we do and is pleased to have resolved this pre-acquisition issue,” said the company's executive vice president of law, policy and communications, Bob Bailey, in a statement.
Bausch + Lomb acquired ISTA after the illegal behavior ended.