BTG unit pleads guilty in U.S. to misbranding, to pay $36 mln

(Adds details about settlement and whistleblower, byline)

By Jonathan Stempel

Nov 7 (Reuters) - A U.S. unit of British drug company BTG Plc pleaded guilty on Monday to improperly marketing its embolic device LC Bead, and will pay about $36 million to resolve its criminal and civil liability, the U.S. Department of Justice said.

Biocompatibles Inc admitted to a misdemeanor charge of introducing a misbranded medical device into interstate commerce, according to papers filed with the federal court in Washington, D.C.

The West Conshohocken, Pennsylvania-based unit will pay an $8.75 million criminal fine and a $2.25 million criminal forfeiture, plus $25 million to resolve civil claims under the federal False Claims Act, the Justice Department said.

LC Bead is used to treat liver cancer, and had in 2002 won U.S. Food and Drug Administration approval to be placed in blood vessels to block or reduce blood flow to hypervascular tumors and certain malformations.

But in signed court papers, Biocompatibles admitted to having from May 2006 to December 2010 marketed LC Bead as a drug delivery device, after having told the FDA in November 2004 that "under no circumstance" would it do so.

The civil accord also resolved charges that Biocompatibles' distributor promoted LC Bead as providing "better" or "superior" therapy for certain types of cancer despite a lack of medical evidence, and resulted in doctors submitting false claims to Medicare and other federal health care programs.

Ryan Bliss, a whistleblower who oversaw the marketing of Biocompatibles' medical products in North America, will receive about $5.1 million form the civil settlement, his lawyers and the government said.

A lawyer for Biocompatibles did not immediately respond to requests for comment.

(Reporting by Jonathan Stempel in New York; Editing by Bernadette Baum, Bernard Orr)