Abbott Labs Settles Depakote Drug Case for $1.6 Billion

Monday, 07 May 2012 04:38 PM

By Greg McDonald

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Abbott Laboratories Inc. has agreed to a $1.6 billion settlement of civil and criminal charges brought by 45 states and the federal government after pleading guilty to the off-label marketing of its anti-seizure drug Depakote.

According to a statement released by Virginian Attorney General Ken Cuccinelli, Abbot will pay out some $700 million in criminal fines and forfeitures and another $800 million in civil payments to the state and the federal government. In addition, the company will pay $100 million to the states to settle related consumer protection cases.

Cuccinelli, who made the announcement in Washington, D.C. along with Deputy U.S. Attorney General James Cole, called it the largest Medicaid fraud case ever brought by a state and the largest settlement of consumer protection case involving pharmaceuticals.

Although the case involved 45 states, Virginia took the lead because it launched an investigation into Abbott labs in 2007 after its Medicaid Fraud Control Unit received a tip the company was marketing the drug for uses other than those approved by the Food and Drug Administration.

“The investigation uncovered that Abbott illegally marketed Depakote for non-approved uses, including as an alternative to antipsychotics to treat dementia patients in nursing homes, and for schizophrenia,” the Cuccinelli statement said. “The investigation also revealed that Abbott paid rebates to healthcare professionals and long-term care pharmacies for increasing their off-label use of Depakote.”

According to the statement, the FDA approved Depakote only for epileptic seizures, bipolar mania, and for the prevention of migraines. It was never approved, Cuccinelli stressed, for controlling behavioral disturbances in dementia patients. In fact, Cuccinelli noted, the company was forced to discontinue a clinical trial of the drug for treatment of dementia because of adverse reactions from patients.

Nonetheless, the statement continued, Abbott “trained its sales force to promote” the drug to healthcare providers and nursing homes “as advantageous over antipsychotic drugs for controlling agitation and aggression in elderly dementia patients.”

In addition, Virginia and federal officials said, the company encouraged pharmacists to recommend the drug for unapproved uses and “paid million of dollars in rebates to pharmacy providers.”

“Not only did Abbott engage in off-label promotion, but it targeted elderly dementia patients and downplayed the risks apparent from its own clinical studies,” said Acting Associate Attorney General Tony West. “As this criminal and civil resolution demonstrates, those who put profits ahead of patients will pay a hefty price.”

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