3 Allergan Employees Held in Japan in Bribery Probe

An Allergan Inc. executive in Japan and two other employees have been arrested and held in custody as authorities investigate bribery allegations over the company’s effort to get a drug approved for sale there.

The Irvine-based eye-care company said Wednesday that the three are still being detained a week after their arrest. A university doctor responsible for testing the drug for the government was also arrested.

The bribery case comes at a time when the company expects sales to soar past last year’s record $1 billion, but is fighting to remain competitive in an industry in which it is overshadowed by pharmaceutical behemoths.

Allergan has long relied on international sales to boost its operations. The company picked up 59% of its $835.2 million in revenue from overseas sales during the first nine months of this year.

In Japan, authorities said that Allergan K.K., the company’s Japanese unit, gave $13,900 to Ryuji Kaji, the doctor in charge of testing the drug, and provided an additional $43,580 to Kaji’s private research organization in 1993 and ‘94, according to Japanese news reports. At the time, Kaji and another doctor at Kyoto University Hospital were conducting tests on the drug, Botox, to determine if it should be recommended for government approval for treating eye muscle disorders. Kaji was quoted in a Tokyo newspaper as saying that the payments didn’t sway test results, but details of the results weren’t available.

Under Japan’s drug-testing system, a pharmaceutical company asks a university or research institution to conduct the tests. The testing institution then reports the results to the government, which decides whether to approve the drug.

Though reports in Japan stated that Botox was approved last month, Allergan spokesman Jeffrey D’Eliscu said Botox has not yet been approved in Japan. He refused to discuss the arrests or the company’s efforts to get the drug approved.

The Allergan executive arrested is Hideo Tajima, 55. The two employees were identified as Masami Hakane and Hiromi Maezono. The three worked in the research and development area, D’Eliscu said, but he would not reveal their titles.

The company, he said, is cooperating fully with Japanese officials.