Abbott to pay $1.6 billion to settle Depakote claims
Libertyville Township-based Abbott Laboratories said it will pay $1.6 billion to settle federal and state claims resulting from an investigation into its neurologic medication Depakote.
The company will pay $800 million to resolve civil allegations split among federal and state governments, $700 million for a criminal penalty, the Justice Department said in a statement.
The settlement results from a four-year-old investigation into the company marketing the epilepsy medicine for unapproved uses, the Abbott Park, Illinois-based company said today in a statement. The company said it is also paying $100 million to the states to resolve consumer protection matters.
"Today's settlement shows further evidence of our deep commitment to public health and our determination to hold accountable those who commit fraud," James M. Cole, Deputy Attorney General, said in the Justice Department statement. "We are resolute in stopping this type of activity and today's settlement sends a strong message to other companies."
The settlement, the second-largest illegal pharmaceutical marketing accord in U.S. history, comes as Abbott officials are pushing ahead with plans to split the firm in two by the end of the year. One of the resulting companies will sell medical products and the other prescription medicines. Abbott's first- quarter revenue climbed 4.6 percent to $9.46 billion, executives said last month.
The company previously announced it had set aside funds to pay settlement of about this size.
'Resolve This Matter'
"We are pleased to resolve this matter and are confident we have the programs in place to satisfy the requirements of this settlement," Laura J. Schumacher, Abbott executive vice president and general counsel said in the statement.
Justice Department officials said last year they were involved in "active settlement discussions" with Abbott over its Depakote marketing practices. The company's announcement came after the government agreed to join cases brought by former Abbott employees alleging the company engaged in so-called off- label marketing of the epilepsy drug starting in the late 1990s.
The whistle-blowers claim the drugmaker marketed Depakote for unapproved uses including agitation and aggression in patients with dementia, autism, sexual compulsion and other disorders.
Approved Uses
Federal regulators only approved Depakote for the prevention of migraines, treating acute manic episodes in bipolar patients and halting seizures in adults and children.
Under U.S. law, a doctor can prescribe a medicine for any condition as long as it's licensed by the U.S. Food and Drug Administration and is proven to be safe and effective. Drug companies aren't allowed to promote a drug for uses other than those approved.
The whistle-blowers will get $84 million from the federal civil recovery portion of the settlement, according to federal False Claims Act provisions.
The Depakote case is U.S. ex rel. McCoyd v. Abbott Laboratories, 1:07-CV-00081, U.S. District Court, Western District of Virginia (Abingdon).