A federal district judge in Virginia on Monday hit Abbott Laboratories with the second-largest criminal fine for a single drug.
The pharmaceutical company was ordered by U.S. District Judge Samuel Wilson of the Western District of Virginia to pay a criminal fine amount of $500 million, a forfeiture of $198.5 million, and $1.5 million to the Virginia Medicaid Fraud Control Unit for marketing the drug Depakote for uses not approved as safe and effective by the U.S. Food and Drug Administration.
Depakote was being promoted to control behavioral disturbances in dementia patients and to treat schizophrenia. According to a Justice Department press release, these uses were never approved by the FDA.
The fines are connected with Abbott’s guilty plea to a criminal misdemeanor charge for misbranding last May.
Abbott also entered a civil settlement agreement under which it agreed to pay $800 million to the federal government and several states to resolve claims that its practices caused false claims to be submitted to government health care programs.
The ruling also required Abbott to enter into a five-year probationary period. As a result, every year Abbott’s CEO and board of directors will need to personally certify that the company is complying with the law.
Abbott has also agreed to enter a five-year corporate integrity agreement with the Office of the Department of Health and Human Services that requires enhanced accountability and transparency, as well as monitoring activities conducted by internal and independent external reviewers.
Stuart Delery, acting assistant attorney general for the DOJ’s Civil Division, said in a release, “Today’s sentencing confirms that the resolution we reached with Abbott in May is the right result. And it emphasizes the importance of the U.S. government’s coordinated efforts to combat health care fraud.”
In a written statement, Abbott spokesman Scott Stoffel said the company was happy to resolve the matter.
“Abbott takes our responsibility to our patients and health care providers very seriously and has comprehensive compliance and training programs,” Stoffel said. “We’re pleased to resolve this matter and look forward to the successful completion of our obligations under the agreements.”
Don Tartaglione is a reporter for The National Law Journal, a Legal affiliate based in New York. This article first appeared on The BLT: The Blog of Legal Times. •