The giant health care company Abbott has admitted that it illegally promoted a prescription drug for unapproved uses and has agreed to pay $1.5 billion to resolve criminal charges and a civil complaint, the Department of Justice announced Monday.
The company acknowledged in the criminal phase of the settlement that from 1998 through 2006 it promoted Depakote as a drug to control agitation and aggression in elderly dementia patients and to treat schizophrenia, despite the fact that the drug had only been approved by the Food and Drug Administration for three uses: to treat epileptic seizures and bipolar mania and for the prevention of migraines, the DOJ said.
“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 of the Civil Division said in a statement. “As this criminal and civil resolution demonstrates, those who put profits ahead of patients will pay a hefty price.”
As described by U.S. authorities, Abbott engaged in various unsavory practices, such as telling nursing home operators that Depakote could keep their costs down by making it easier to control patients and making illegal payments to health care professionals for promoting the drug.
The Justice Department described the resolution as the second-largest ever against a drug company. The biggest was the $2.3 billion that Pfizer agreed to pay in 2010. In 2009, Eli Lilly agreed to pay $1.415 billion.
In the criminal phase of the action, Abbott has pleaded guilty to a misdemeanor and will pay a fine of $500 million, forfeit assets of $198.5 million, and submit to probation for five years, the Justice Department said. It will also also pay $1.5 million to the Virginia Medicaid Fraud Control Unit.
Under the civil settlement, Abbott will pay $560,851,357 to the federal government $239,148,643 to the states that opt to participate in the agreement to resolve claims that its unlawful marketing and illegal remuneration practices caused false claims to be submitted to government health care programs, the DOJ said. The settlement addresses allegations that, from 1998 to 2008, Abbott unlawfully promoted Depakote for various unapproved uses, including psychiatric problems in children and adolescents.
Abbott, which has about 91,000 employees worldwide and had revenues of $38.9 billion in 2011, according to its website, said in a statement that it was pleased to put the matter behind it.
“We are pleased to resolve this matter and are confident we have the programs in place to satisfy the requirements of this settlement,” said Laura J. Schumacher, executive vice president and general counsel. “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.”
The civil settlement resolves four lawsuits in the Western District of Virginia under the whistleblower provisions of the False Claims Act. The whistleblowers involved in the Abbott case will receive $84 million from the federal share of the settlement, the Justice Department said.