Depakote was approved for use to treat epileptic seizures, bipolar episodes and migraines, but Abbott admits in the settlement that between 1998 and 2006 it heavily promoted the drug in nursing homes for treatment of schizophrenia and for aggression in elderly dementia patients. In 1999, Abbott ended a trial of the drug for elderly dementia after an increased prevalence of side-effects like dehydration and anorexia.Abbott Laboratories has agreed to pay $1.5 billion and plead guilty to a criminal charge of misbranding its anti-convulsant Depakote following whistle-blower allegations that the pharmaceutical company promoted the drug for off-label uses and paid clinicians to prescribe it.
The company will pay $500 million in criminal fines and $199 million in asset forfeitures, plus submit to five years of probation, for misbranding Depakote for non-approved uses.
More broadly, Abbott officials agreed to pay $800 million to resolve civil allegations that its marketing efforts caused Medicare and state Medicaid programs, among other healthcare programs, to pay for prescriptions of the drug for a wider range of non-approved uses. The civil settlement also resolves allegations that the company violated the federal anti-kickback statute by paying clinicians and nursing homes to prescribe the drug for non-approved uses, the Justice Department statement said.
Under the civil settlement, the federal government will receive $561 million, and the states that opt into the settlement will receive shares of $239 million. Whistle-blowers who brought four separate False Claims Act lawsuits will receive shares of $84 million from the federal settlement.
The company did not admit wrong-doing as part of the civil settlement, “except to the extent that Abbott has admitted facts in the civil settlement agreement or in the criminal plea and agreed statement of acts filed in the criminal action,” the statement says. Those documents were not yet filed in federal court as of Monday afternoon.
In a statement, Abbott said it had already set aside the $1.5 billion to cover the cost of the criminal penalties and civil fines.
"We are pleased to resolve this matter and are confident we have the programs in place to satisfy the requirements of this settlement," Laura Schumacher, Abbott executive vice president and general counsel, said in a statement. "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."
Abbott has previously announced plans to separate into two publicly traded companies by the end of 2012, and the company statement said the corporate integrity agreement will stay with the spin-off research company, to be called AbbVie.