Abbott Labs to pay $1.6B for off-label drug promotion
Abbott Laboratories, a global healthcare company, has agreed to pay $1.6 billion to settle allegations that it improperly marketed its neurological drug, Depakote, for off-label uses.
Abbott will pay $800 million to federal and state governments to settle civil allegations, a $700 million criminal penalty and $100 million to resolve consumer protection matters. In a statement released by the Department of Justice, the agency said that this resolution is the second largest payment by a drug company.
“(Monday’s) settlement demonstrates our continued scrutiny of the sales and marketing practices of pharmaceutical companies that put profits ahead of patient health,” said U.S. Food and Drug Administration Commissioner Margaret Hamburg, MD, in the DOJ’s statement. “The FDA will continue its due diligence and hold pharmaceutical companies accountable for marketing practices that undermine the drug approval process.”
According to the DOJ, the FDA approved Depakote for epileptic seizures, bipolar mania and migraine prevention. As part of the agreement, Abbott has pled guilty to promoting Depakote to control agitation and aggression in elderly dementia patients and to treat schizophrenia.
“As the agreed statement of facts filed in court today demonstrates, Abbott promoted Depakote to control behaviors in elderly dementia and schizophrenia patients without significant evidence of its effectiveness for that use, and even after clinical data established that it was not effective,” said Timothy Heaphy, U.S. attorney for the Western District of Virginia, in the DOJ’s statement. “The resolution announced (Monday) includes a self-policing mechanism by which Abbott’s board of directors will monitor compliance with the law and report any violations, as well as a period of probation and court supervision. We credit Abbott’s acceptance of responsibility and encourage other pharmaceutical companies to impose the similar mechanisms to prevent off-label marketing, which damages healthcare consumers.”
“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, Abbott’s executive vice president, general counsel, in a statement about the resolution. "The company takes its responsibility to patients and healthcare providers seriously and has established robust compliance programs to ensure its marketing programs meet the needs of healthcare providers and legal requirements.”
In a press release, Abbott said it had put aside the $1.6 billion in anticipation of the settlement and that it will split into two publicly traded companies by the end of the year. Once the separation is completed, the compliance measures and certification requirements laid out in the settlement will transfer to its research-based pharmaceutical company, AbbVie. The settlement’s five-year Corporate Integrity Agreement with the Office of Inspector General will also transfer to AbbVie.
