After having violated the terms of its 2007 agreement with Massachusetts and 26 other states, with regard to TV ads for its oral contraceptive Yaz, German drug-maker Bayer AG has finally settled the case.

The verdict, filed in Suffolk Superior Court, Massachusetts, resolves FDA allegations about Bayer's misleading ads for Yaz in 2008.

As per the FDA, Yaz is a medication approved only for certain kinds of acne; however, last year, two of Bayer's direct-to-consumer ads about Yaz were misleading. FDA said the contentious ads put across Yaz as a medicine for treating premenstrual syndrome (PMS), thereby endorsing the contraceptive as an acne-treatment drug, which it was not what it was approved for.

The legal settlement requires Bayer to put forward all its Yaz TV and print ads before the FDA for appraisal, and adhere to the agency's suggestions. For referring to symptoms that Yaz could be a possible treatment for, the drug-maker would be required to "clearly and conspicuously" reveal in the advertisements what the FDA has approved.

In a statement, Massachusetts Attorney General Martha Coakley said that the pharmaceuticals giant was cautioned about its overstatement of the effects of Yaz on acne. The company has agreed to undertake a $20 million remedial advertising program, as well as seek the approval of US regulators regarding any television ad for Yaz.