Connecticut will receive $6 million as part of a massive $1.5 billion civil and criminal health care fraud settlement between a large pharmaceutical company and federal and state governments over allegations the company promoted a drug for unauthorized uses.
Specifically, according to state Attorney General George Jepsen, Illinois-based Abbott Laboratories promoted the sale and use of the prescription drug Depakote for uses that were not approved by the U.S. Food and Drug Administration (FDA) as safe and effective.
Depakote is approved by the FDA for treatment of seizure disorders, mania associated with bipolar disorder and to prevent migraine headaches.
But according to officials, Abbott also marketed the drug for behavioral disturbances in dementia patients, anxiety, conduct disorders, obsessive-compulsive disorder, post-traumatic stress disorder, alcohol and drug withdrawal, attention deficit disorder, autism and other psychiatric conditions.
"These settlements were the result of hard work and cooperation at both the federal and state levels," said Jepsen in a statement. "They will serve as a deterrent to other companies who seek to benefit unfairly from government healthcare programs. Most importantly, they will help to protect consumers who were prescribed an expensive drug with little evidence the drug could help their condition."
According to the allegations in the complaint, Abbott promoted Depakote for unapproved uses by making false and misleading statements about its safety, efficacy, dosing, and cost-effectiveness; improperly marketing the product for use in nursing homes; and by offering and paying illegal remuneration to health care professionals and long-term care pharmacy providers to promote and/or prescribe Depakote.
The company admitted that it trained a specialized sales force to promote Depakote for treatment of dementia because the drug was not subject to federal regulations designed to prevent the use of unnecessary medications in nursing homes.
The company also marketed Depakote to treat schizophrenia. Clinical trials failed to demonstrate that adding Depakote was any more effective than antipsychotic drugs in treating schizophrenia, according to court documents.
Under the care of a physician, patients are sometimes prescribed drugs for purposes not approved by the FDA. However, pharmaceutical companies cannot market drugs for unapproved purposes.
Abbott agreed to pay the state and federal governments $800 million in civil damages and penalties. The net state share for Connecticut Medicaid claims is more than $3.9 million. Connecticut also will receive an additional $499,000 for state-funded benefit programs administered by the state Department of Social Services.
"Our claims data indicated a significant and inappropriate impact on Medicaid expenditures, a factor that will now be mitigated by this major settlement," said Roderick L. Bremby, the state’s social services commissioner.
An additional $100 million settlement with 45 states and the District of Columbia, resolved the civil consumer protection claims that the company engaged in unfair and deceptive practices with the illegal off-label marketing of Depakote. Connecticut’s share of the consumer protection settlement is more than $1.5 million, including $150,000 for the Department of Consumer Protection’s Prescription Drug Monitoring Program.
"This settlement’s positive impact for Connecticut consumers extends well beyond the specific practices identified in the complaint," Consumer Protection Commissioner William M. Rubenstein said in a statement. "The funding that the settlement provides for Connecticut’s Prescription Monitoring Program will directly benefit patient health by assisting pharmacists and physicians to better monitor potentially dangerous drug interactions and prescription errors."
Abbot also agreed to a $700 million criminal fine and forfeiture for violating the federal Food, Drug and Cosmetic Act. The company pled guilty to one count of misdemeanor misbranding.
"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, general counsel of Abbott, in a statement. "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."
At a recent news conference at the U.S. Justice Department, U.S. Attorney Timothy Heaphy, of the Western District of Virginia, said that executives at Abbott’s top levels carried out a strategy of systematically marketing the drug for purposes other than what federal regulators had allowed. The illegal conduct was not the product of "some rogue sales representatives," said Heaphy, who added that Abbott engaged in the strategy from 1998 to at least 2006. The initial lawsuits in the case were filed in Virginia.
Assistant Attorney General Thomas Saadi handled the consumer protection settlement for Connecticut along with Assistant Attorney General Phillip Rosario, head of the consumer protection department.