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Abbott Labs agrees to pay $1.6 billion to settle Depakote cases

May 07, 2012|By Peter Frost

Abbott Laboratories said it will pay $1.6 billion to settle federal and state claims that it improperly marketed the neurological medication Depakote for off-label uses.

Abbott will pay $800 million to resolve civil allegations split among federal and state governments, $700 million in criminal penalties and $100 million to states to resolve consumer protection matters, the Abbott Park, Ill., company said Monday.

Abbott said in previous filings with the Securities and Exchange Commission that it had earmarked $1.5 billion for a potential settlement.

Under terms of the settlement, Abbott has agreed to plead guilty to one misdemeanor violation of the Food, Drug and Cosmetic Act for misbranding. The company also will be restricted from marketing the drug for off-label uses.

Depakote, an anti-seizure and mood-stabilizing drug, is approved by the Food and Drug Administration to treat epilepsy, bipolar disorder and migraine prevention. Lawsuits filed by four groups of whistle-blowers alleged that Abbott marketed the drug for off-label uses, including for treatment of schizophrenia, dementia and autism. The Justice Department intervened in those suits to determine whether the company's marketing of the drug violated civil and criminal laws, including fraudulently charging Medicare and Medicaid.

Those lawsuits alleged that Abbott encouraged and trained its salespeople to market Depakote off-label to nursing-home directors, geriatric doctors and other long-term-care providers. The company also gave doctors illegal kickbacks to talk about off-label uses of the drug to boost sales, according to the whistle-blower suits, which were filed in federal courts in Illinois, Virginia and the District of Columbia.

Although doctors are allowed to prescribe drugs "off-label," as the practice is known, companies are prohibited from marketing them to treat conditions not approved by the FDA.

The FDA approved Depakote in 1983 to treat certain seizures in adults and children age 10 and older. Since then, the drug has been approved to treat other types of seizures and manic episodes of bipolar disorder and to prevent migraine headaches.

The FDA, which has ramped up its investigation of off-label drug marketing, has won several large settlements from other drug makers in recent years.

In November, GlaxoSmithKline said it would pay the U.S. government $3 billion to settle civil and criminal charges for illegal marketing of diabetes drug Avandia and others. In 2009, Pfizer Inc. paid $2.3 billion for similar allegations about its painkiller Bextra, and Eli Lilly & Co. settled for $1.4 billion the same year for Zyprexa, used to treat schizophrenia.

pfrost@tribune.com

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