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Abbott Labs to Pay $1.5 Billion For Off-Label Marketing of Anti-Seizure Drug

Tuesday, May 15, 2012
By James Swann

 

Abbott Laboratories May 7 reached a $1.5 billion settlement with the Department of Justice over off-label marketing of the anti-seizure drug Depakote, which settles criminal and civil allegations involving misbranding the drug to elderly beneficiaries.

“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,” acting Associate Attorney General Tony West said during a May 7 press conference.

Deputy Attorney General James M. Cole, speaking at the same event, said the Abbott settlement was the second-largest ever for a pharmaceutical company.

Laura J. Schumacher, Abbott's executive vice president and general counsel, issued a statement May 7 on the company's website that said Abbott was glad to resolve the issue of off-label marketing.

“The company takes its responsibility to patients and health care providers seriously and has established robust compliance programs to ensure its marketing programs meet the needs of health care providers and legal requirements,” Schumacher said.

The off-label marketing allegations were brought originally to the Virginia Medicaid Fraud Control Unit in 2007, Virginia Attorney General Kenneth T. Cuccinelli II (R) said during the press conference.

The whistleblowers were not from Virginia, Cuccinelli said, but they were familiar with the national scope of work done by the Virginia MFCU.

Initial Investigation.
West said the DOJ settlement was a testament to cooperation and teamwork at all levels of government.

Following an initial investigation led by Cuccinelli's predecessor, Bob McDonnell (R), now Virginia's governor, the Virginia MFCU contacted the U.S. attorney for the Western District of Virginia for further investigation.

U.S. Attorney for the Western District of Virginia Timothy Heaphy said the investigation discovered that the off-label marketing of Depakote was an intentional corporate policy and not the result of a few rogue employees.

The settlement agreement with DOJ was filed in Abingdon, Va., southwest of Roanoke, Va.

“As the agreed statement of facts filed in court today demonstrates, Abbott promoted Depakote to control behaviors in elderly dementia and schizophrenic patients without significant evidence of its effectiveness for that use, and even after clinical data established that it was not effective,” Heaphy said at the press conference.

He said Abbott entered into contracts with long-term care pharmacies that provided rebates for the increased use of Depakote and trained individual pharmacists on the off-label uses of the drug. Abbott also created a dedicated sales force that marketed the drug to nursing home providers, Heaphy said.

Settlement Conditions.
Under the settlement, Abbott admitted to engaging in off-label promotion for Depakote from 1998 until 2006. The company will pay a criminal fine of $500 million and will forfeit $199 million in assets.

The company also will pay roughly $561 million to the federal government and $239 million to participating states to settle claims that off-label marketing of Depakote led to the submission of false claims to federal health care programs.

New York, for example, will receive $50 million under the settlement, according to Attorney General Eric T. Schneiderman (D).

“Consumers should be able to rely on their doctor's advice for prescriptions without having to worry that their doctors have been manipulated by pharmaceutical companies,” he said in a May 7 statement to reporters in New York.

Connecticut Attorney General George Jepsen (D) May 7 said in a statement that his state would receive $3.9 million from the settlement. He said the settlements “will serve as a deterrent to other companies who seek to benefit unfairly from government healthcare programs.”

Corporate Integrity Agreement.
Nonmonetary components of the settlement include a five-year corporate integrity agreement with the Department of Health and Human Services Office of Inspector General, as well as a five-year probationary period that will be supervised by a federal court.

HHS Inspector General Daniel R. Levinson, appearing at the Department of Justice press conference, said OIG is committed to protecting nursing home residents. He said the corporate integrity agreement will hold Abbott's board and executives accountable for their actions.

Depakote was approved by the Food and Drug Administration for epileptic seizures, bipolar mania, and migraine prevention. Manufacturers are prohibited from marketing a drug for a condition not approved by the FDA.

Concurrent with the DOJ settlement, Abbott reached a $100 million settlement with 44 states and the District of Columbia over the off-label marketing of Depakote.

By James Swann


The statement from the Department of Justice is at http://www.justice.gov/opa/pr/2012/May/12-civ-585.html. A statement from Cuccinelli describing Abbott's separate settlements with the states is at http://www.oag.state.va.us/Media%20and%20News%20Releases/News_Releases/Cuccinelli/050712_Abbott_Labs.html


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