Fraud: Abbott Labs To Pay $1.5 Billion To Resolve Charges Of Off-Label Drug Marketing | May 14, 2012 Issue - Vol. 90 Issue 20 | Chemical & Engineering News
Volume 90 Issue 20 | p. 9 | News of The Week
Issue Date: May 14, 2012

Fraud: Abbott Labs To Pay $1.5 Billion To Resolve Charges Of Off-Label Drug Marketing

Department: Business
Keywords: fraud, off-label marketing, settlement, fines

Abbott Laboratories has agreed to pay a combined $1.5 billion to the U.S. government and nearly all the states to settle charges that it illegally promoted the antiseizure drug Depakote for uses not approved by FDA.

Among the charges by Justice Department prosecutors was that Abbott promoted Depakote in nursing homes to control agitation and aggression in elderly patients with dementia and to treat schizophrenia. FDA had approved Depa­kote only to control epileptic seizures and bipolar mania and to prevent migraines.

The settlement includes a criminal fine and forfeitures of $700 million to the U.S. government. It also includes payments of $561 million to the federal government and $239 million to state governments to settle charges of illegally billing health care programs such as Medicaid. In addition, Abbott agreed to plead guilty to one misdemeanor for misbranding Depakote under the Food, Drug & Cosmetic Act.

James M. Cole, deputy U.S. attorney general, says the settlement shows the Justice Department’s commitment “to hold accountable those who commit fraud.”

Abbott’s general counsel, Laura J. Schumacher, says the firm was “pleased to resolve this matter” and has set up compliance programs per an agreement with the Justice Department to monitor marketing efforts.

Other drug firms such as GlaxoSmithKline and Pfizer have paid billions of dollars to settle similar charges of fraudulent marketing.

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