By Peter Loftus 

Drug maker Actavis PLC has held discussions with the Justice Department about resolving an investigation into the marketing tactics at a division, including allegations of improper payments to doctors, according to a regulatory filing and court documents.

Actavis "has met with the government to discuss the status, and a potential resolution of, its investigation" of Actavis's Warner Chilcott unit, Actavis said in its first-quarter report filed with the Securities and Exchange Commission this week, updating the status of an investigation that Warner Chilcott first disclosed in 2012, before it was acquired by Actavis in 2013.

Dublin-based Actavis also said it booked a "contingent liability" for the first quarter in connection with the case, but it didn't specify the amount. Companies are required under accounting rules to book such losses when a legal settlement is probable and they are able to estimate the amount.

Multiple drug companies have settled government investigations of their sales and marketing practices in recent years, paying fines and penalties and sometimes pleading guilty to criminal violations of drug laws. Johnson & Johnson, GlaxoSmithKline PLC and Pfizer Inc. have paid some of the highest amounts to settle such probes.

An Actavis spokesman declined to comment beyond the SEC filing. A Justice Department spokeswoman declined to comment.

The U.S. attorney's office for the District of Massachusetts sent subpoenas to Warner Chilcott and several of its current and former employees beginning in February 2012, according to this week's Actavis SEC filing and a 2012 SEC filing by Warner Chilcott. The prosecutors sought information about sales and marketing, payments to people who are in a position to recommend drugs, medical education, and physician remuneration in connection with several Warner Chilcott products, Actavis said in its SEC filing.

The government probe centers on some of the allegations detailed in a whistleblower lawsuit filed by two former sales representatives against Warner Chilcott in 2011 in federal court in Boston, according to a court document filed jointly in that case in 2013 by attorneys for the sales reps and Warner Chilcott, and a separate court document filed in the case in 2013 by the Justice Department. The suit alleges the company engaged in fraudulent marketing of several drugs from 2003 through 2011, including the ulcerative-colitis treatment Asacol, osteoporosis treatment Actonel, and birth-control pill Loestrin.

The lawsuit alleges the company paid doctors speaking fees to induce them to prescribe the drugs, and promoted uses for drugs that weren't approved by the U.S. Food and Drug Administration, which caused government health programs to pay for prescriptions that shouldn't have been paid. The suit alleges the company treated doctors and nurses to dinners and drinks, dubbing some events as "nurses night out," to pressure them into prescribing its drugs.

The suit also accuses Warner Chilcott of instructing sales reps to help physician practices fill out "prior authorization" paperwork to gain insurance reimbursement for prescriptions of the company's products, in violation of federal health-privacy laws. Warner Chilcott has denied the allegations in court documents.

The former sales reps filed their lawsuit on behalf of the U.S. government under the federal False Claims Act. A provision of that act allows people who file such lawsuits to receive a portion of any resulting recovery by the government, as an incentive to come forward with information about suspected fraud.

The Justice Department notified a federal judge in 2013 it wouldn't officially join the lawsuit at that time because it was still investigating, according to a document it filed in the case. But the Justice Department asked the court that year to put the lawsuit on hold to prevent discovery proceedings from interfering in a continuing criminal investigation of the allegations, according to the court document jointly filed by attorneys for plaintiffs and Warner Chilcott. A federal judge granted the stay, and recently extended it to July 1 at the request of the Justice Department, according to the court docket.

"Our complaint alleges serious violations of the health-care laws," Stephen Weiss, an attorney for the former sales reps, said in an interview. "It stands to reason that the government's investigation implies they agree with the seriousness of the allegations. The outcome of that investigation should soon be known."

As of March 31, Actavis had accrued loss contingencies of $375 million, according to its SEC filing, to account for legal proceedings and other matters; it didn't break out a total for the Warner Chilcott case.

Write to Peter Loftus at peter.loftus@wsj.com

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