Abbott was marketing its anti-seizure drug Depakote off-label uses for schizophrenia and even migraines. Now they owe the US government $700 million dollars, as a federal judge approved a $1.6 billion settlement between the manufacturer and the U.S. Department of Justice.
(MORE: Patients Not Aware When Drugs Are Prescribed For “Off-Label” Use)
In May 2012 Abbott pleaded guilty to a criminal misdemeanor charge for its off-label marketing of Depakote, generically known as divalproex sodium and valproic acid, which violates the Federal Food, Drug and Cosmetic Act.
According to the Justice Department, Abbott marketed Depakote for such off-label uses like schizophrenia, agitated dementia, mania associated with bipolar disorder, and migraines even though the drug was approved only for treatment of seizure disorders..
The Department of Justice accused Abbott of marketing Depakote for even more “psychiatric conditions in adults, including depression, anxiety, obsessive-compulsive disorder, post-traumatic stress disorder, alcohol and drug withdrawal and psychiatric conditions in children, including conduct disorders, attention deficit disorder and autism.”
Although doctors may prescribe drugs for any purpose, pharmaceutical companies are prohibited from promoting drugs for conditions that are not approved by the agency.
According to the Justice Department, Abbott admitted to setting up a “specialized sales force” that marketed Depakote in nursing homes to control agitation and aggression in aging patients with dementia, even though there was no evidence that it was safe and effective for such use.
The company trained its sales representatives to promote Depakote to nursing homes as a way to sedate patients without running afoul of a federal law intended to prevent overuse of certain medications.
“Abbott sales representatives stated that by using Depakote, nursing homes could avoid the administrative burdens and costs of complying with” the law, according to the Justice Department news release.
From 2001 to 2006, Abbott marketed the drug for use along with antipsychotic drugs to treat schizophrenia, even though the company’s clinical trials showed that taking Depakote was not more effective than using the antipsychotic drugs.
The company said in a news release that it had been under investigation for four years in connection with sales that dated back to 1998.
The company also pled guilty to one misdemeanor charge of misbranding for violating the Food, Drug and Cosmetic Act. The agreements include several conditions the company must meet to show it is properly marketing the drug.
Abbott’s actions were particularly atrocious because they aimed at older patients with dementia, “people who didn’t have the ability to engage in informed consent,” said Reuben Guttman, the lawyer who represented Meredith McCoyd, a former Abbott sales representative who was the lead whistle-blower in the case.
For these offenses, Abbot will pay a criminal fine of $500 million, which is the second-largest for off-label marketing of a single drug, the U.S. Department of Justice has stated. Abbott also agreed to forfeit $198.5 million in assets, pay $1.5 million to the Virginia Medicaid Fraud Control Unit and remain on probation for five years.
At the same time, the drugmaker settled a civil suit for $800 million, which will be paid to the federal government and the states involved.
This settlement also absolved Abbott CEO Miles White of any further responsibility in the wrongdoing of his company. At least one whistleblower case claimed White not only knew about the off-label marketing of Depakote, but also encouraged it because it increased his compensation, Crain’s Chicago Business reports. Abbott’s deal with the U.S. Department of Justice means those allegations will not be pursued.
“We are pleased to resolve this matter and are confident we have the programs in place to satisfy the requirements of this settlement,” Laura J. Schumacher, the general counsel for Abbott, said.
“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.”
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