(Adds details on court ruling)
BOSTON, Nov 20 (Reuters) - A judge on Monday rejected a plea deal that was part of Aegerion Pharmaceuticals Inc's recent agreement to pay $40.1 million to resolve U.S. probes of its marketing of a cholesterol drug, saying it was "not in the public interest."
U.S. District Judge William Young in Boston ruled the U.S. Justice Department's deal with the Novelion Therapeutics Inc unit "unduly hobbles" his duties as a judge by restricting his ability to impose a sentence.
Young said the agreement showed "the shocking disparity between the treatment of corporations and individuals in our criminal justice system."
While people who plead guilty face judges with discretion on sentencing, corporations like Aegerion can obtain deals that restrict what punishment the judge can impose, giving them the "most effective damage control," Young wrote.
He commended Aegerion's new management for cooperating in the probe. But Young criticized the plea deal's lack of any payment to victims and said the agreement failed to justify fully why its financial terms were acceptable.
"What is left unexplained is why the government does not simply let Aegerion collapse in disgrace," Young wrote. "Surely Aegerion is not too big to fail."
The judge, who at least twice before rejected similar corporate plea deals, ordered the case ready for trial.
A spokeswoman for Cambridge, Massachusetts-based Aegerion had no immediate comment. Representatives for Acting U.S. Attorney William Weinreb, whose office was pursuing the case, did not immediately respond to requests for comment.
The plea deal came as part of a set of settlements with the Justice Department and the U.S. Securities and Exchange Commission announced on Sept. 22 aimed at resolving a long-running probe centered on its Juxtapid cholesterol drug.
Prosecutors said that after the U.S. Food and Drug Administration in 2012 approved Juxtapid for treating high cholesterol in people with a rare genetic disease, Aegerion promoted it for patients who did not have the condition.
As part of a deal with the Justice Department, Aegerion agreed to plead guilty to two misdemeanor drug misbranding violations of the Food, Drug and Cosmetic Act and pay $36 million to resolve criminal and civil claims.
Aegerion, which in 2016 merged with QLT Inc and became a subsidiary of the newly named Novelion, also entered a deferred prosecution agreement to resolve a charge that it conspired to violate the Health Insurance Portability and Accountability Act.
The case is U.S. v. Aegerion Pharmaceuticals Inc, U.S. District Court, District of Massachusetts, No. 17-cr-10288. (Reporting by Nate Raymond in Boston; editing by Susan Thomas and Dan Grebler)