Abbott Laboratories to Pay $1.5B for Off-Label Drug Marketing

Rob Stigile

Legal Times

05-09-2012

In the second-largest payment ever by a drug company, Abbott Laboratories agreed Monday to pay $1.5 billion and enter a guilty plea in federal district court in Virginia for unlawfully marketing one of its medications to seniors for off-label uses.

The settlement, announced in a Justice Department statement today, is still pending approval by the court. The settlement provides for a criminal fine and forfeiture of $700 million, and civil settlements of $800 million, to be split between the federal government and states that choose to participate in the agreement.

The drug Depakote originally was approved by the Food and Drug Administration to control epileptic seizures, bipolar mania and preventing migraines. The company admitted in the plea that it ran a marketing program that urged nursing homes to use the drug to help treat schizophrenia and control aggression in dementia patients.

“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 said.

The clinical trials West alluded to were conducted by Abbott and failed to show that treatment of schizophrenia was more effective when traditional antipsychotic medications were paired with Depakote, according to the DOJ statement. Following the conclusion of those two trials, the company waited a full two years before alerting its sales team and stalled another two years before publishing its findings, all the while promoting the drug for off-label schizophrenia treatment, the government found.

Additionally, the company's sales team marketed the drug to health care providers as superior to traditional antipsychotics when attempting to control aggression and agitation in dementia patients.

Abbott also produced training materials that encouraged pharmacy provider employees to promote Depakote for these off-label uses and paid millions of dollars in rebates to those companies.

Going forward, the company will operate under a corporate integrity agreement with the Department of Health and Human Services' Office of Inspector General for five years. Among other provisions, the agreement forces the company to publish on its website payments to doctors. Any material breach of the agreement exposes the company to exclusion from federal health care programs, with less significant breaches resulting in monetary penalties.

“Our integrity agreement will hold Abbott accountable for preventing future violations of federal health care laws and FDA requirements, which will protect federal programs, taxpayers and our most vulnerable patients,” said Health and Human Services Inspector General Daniel Levinson in the statement.

Grant & Eisenhofer and Blank Rome are among the firms that represent whistleblowers involved in the suits being settled with Abbott.

"Abbott's unlawful practices showed how the company elevated aggressive sales and marketing of Depakote over medical decision-making, violating basic norms of health care and ethics,” said Grant & Eisenhofer partner Reuben Guttman in a staement. He was lead counsel to Melinda McCoyd, a former Abbott sales executive in Atlanta who came forward with off-label marketing allegations.

This article originally appeared as a post on The BLT: The Blog of LegalTimes