Setting a Record: Abbott Labs Agrees to Pay $1.5 Billion for its Off-Label Marketing of Depakote

Resolving its criminal and civil liability with the Government is going to cost Abbott $1.5 billion as the result of its unlawful marketing of Depakote.  This payment represents the second largest healthcare fraud payment by a pharmaceutical company in a False Claims Act case and includes a criminal fine and forfeiture of $700 million and a civil settlement including payment to the states’ Medicaid program of $800 million.

Abbott plead guilty for misbranding Depakote, which is a criminal misdemeanor.  As the result of this criminal plea, Abbott will pay a criminal fine of $500 million and forfeit $198.5 million in assets as well as serve a probationary term for five years.  As the result of the civil settlement, Abbott agreed to pay $800 to the federal government and $239.1 million to the states to resolve its off-label marketing and kickback practices that caused false claims to be submitted to government health care programs.

The civil settlement resolved four qui tam lawsuits, including allegations that: Abbott promoted Depakote off-label in a variety of different ways which included a complex kickback scheme.  First, the company provided long-term care pharmacies with rebates based on their increases in the use of Depakote in nursing homes serviced by those pharmacies.  Second, the company engaged employees of nursing home to help them promote the drug.  Third, the company trained those long term care pharmacists to encourage and recommend the drug for unapproved uses.  In addition, Abbott paid millions of dollars in rebates to pharmacy providers who were not entitled to these rebates.

Depakote was FDA approved for epileptic seizures, bipolar mania and the prevention of migraines.  Abbott was alleged to have promoted the drug for non-FDA approved uses:  to control agitation and aggression in elderly dementia patients and to treat schizophrenia and it admitted that from 1998 through 2006 the company marketed Depakote in nursing homes for those indications.  This was done despite the fact that there was no credible scientific evidence that Depakote was safe and effective to treat those uses. Further, it was alleged that from 2001 through 2006 Abbott promoted Depakote along with atypical antipsychotic drugs to treat schizophrenia despite the fact that Abbott’s clinical trials revealed that Depakote was no more effective than an atypical antipsychotic drug alone to treat schizophrenia.

While the criminal fines and civil penalties continue to mount against pharmaceutical companies, the problem of pharmaceutical fraud continues to increase.  It will be interesting to watch to see if any state boards investigate or take action against the providers remunerated in Abbott’s kickback schemes.  If the past is a window to the present, other than this large payment by Abbott, these other smaller providers will likely not suffer any ramifications as the result of their conduct.

More information for whistleblowers is located at the Nolan & Auerbach, P.A. website.