Attorney General Peter F. Kilmartin today joined fellow attorneys general in announcing two settlements with Abbott Laboratories over allegations of illegal off-label marketing of its drug, Depakote. The Attorney General's Medicaid Fraud and Patient Abuse Unit and the Consumer Protection Unit were members of the respective multistate groups that investigated Abbott Laboratories.
In one settlement, 49 states, the District of Columbia and the federal government reached a $1.5 billion agreement with the company to settle civil and criminal allegations that Abbott Laboratories illegally marketed Depakote, which resulted in false claims to Medicaid and other federal healthcare programs. The $1.5 billion settlement is the second largest recovery from a pharmaceutical company in a single civil and criminal global resolution.
In a separate agreement, 45 states, the District of Columbia and the federal government reached a $100 million agreement with the company under the respective federal and states' consumer protection laws. Rhode Island's complaint, filed with the Providence County Superior Court, alleges specific violations of the Rhode Island Deceptive Trade Practices Act. The agreement marks the largest consumer protection-based pharmaceutical settlement ever reached in the United States.
Rhode Island will receive approximately $1.22 million under the Medicaid settlement and $1.14 million under the consumer protection settlement. In addition, Abbott will be restricted from marketing the drug for off-label uses not approved by the U.S. Food and Drug Administration.
"This settlement sends the message to the pharmaceutical industry that the marketing of drugs for off-label uses and charging states for them will not be tolerated," said Attorney General Kilmartin. "Time and time again, big pharmaceutical companies knowingly sidestep FDA rules in exchange for a greater profit. It is not only unethical, it is illegal."
The states contend that from January 1998 through December 31, 2008, Abbott promoted the sale and use of Depakote for uses that were not approved by the Food and Drug Administration as safe and effective. This alleged conduct resulted in false claims to Medicaid and other federal healthcare programs. Further, the covered conduct from the settlement provides that Abbott Laboratories made false and misleading statements about the safety, efficacy, dosing and cost-effectiveness of Depakote for some unapproved uses; improperly marketed the product in nursing homes; and paid illegal remuneration to health care professions and long term care pharmacy providers to induce them to promote and/or prescribe Depakote.
Abbott Laboratories will pay the states and the federal government a total of $800 million in civil damages and penalties to compensate Medicaid, Medicare and various federal healthcare programs for harm suffered as a result of its conduct. In addition to the civil settlement, Abbott Laboratories pled guilty this morning to a violation of the Food, Drug and Cosmetic Act (FDCA) and agreed to pay a criminal fine and forfeiture of $700 million. Further, as a condition of the settlement, Abbott Laboratories will enter into a Corporate Integrity Agreement with the United States Department of Health and Human Services, Office of the Inspector General.
In a separate complaint filed today along with the settlement agreement, the states alleged that Abbott engaged in unfair and deceptive practices when it marketed Depakote for off-label uses. Depakote is approved for treatment of seizure disorders, mania associated with bipolar disorder and prophylaxis of migraines, but the attorneys general alleged that Abbott marketed the drug for treating unapproved uses, including schizophrenia, agitated dementia and autism.
As a result of the states' investigation, Abbott has agreed to significantly change how it markets Depakote and to cease promoting off-label uses.