Off-label promotion of divalproex leads to $700 million fine

October 5, 2012

Abbott Laboratories Inc. was sentenced Oct. 2 to pay a total of $700 million after pleading guilty in May to misbranding divalproex (Depakote), a criminal misdemeanor.

Abbott Laboratories Inc. was sentenced Oct. 2 to pay a total of $700 million after pleading guilty in May to misbranding divalproex (Depakote), a criminal misdemeanor.

From January 1998 to December 2006, Abbott promoted the drug to control behavioral disturbances in dementia patients, and from January 2002 to December 2006, the company promoted the drug to treat schizophrenia, according to a U.S. Department of Justice press release.

Divalproex is approved for the indicated for the treatment of the manic episodes associated with bipolar disorder.

"We expect companies to make honest, lawful claims about the drugs they sell, we will be vigorous in our enforcement efforts when they break the law, and the courts will hold them accountable." said Stuart F. Delery, Acting Assistant Attorney General for the Justice Department’s Civil Division.

The FDA had not approved the drug for either of these uses, which resulted in the misbranding violation of the Federal Food, Drug and Cosmetic Act (FDCA).

"Abbott, which was ordered to pay a criminal fine in the amount of $500 million, plus a forfeiture of $198.5 million, and $1.5 million to the Virginia Medicaid Fraud Control Unit, will also be subject to a five-year term of probation," according to the release. "Under the terms of the plea agreement, Abbott agreed to pay the second-largest criminal fine for a single drug, executed a fulsome statement of facts (with exhibits) revealing the extent of its unlawful conduct, admitted that it engaged in misleading statements, and submitted to a five-year term of probation."

As part of the probation, Abbott's CEO and board of directors must "personally certify that the company is complying with the law."

"Abbott unlawfully targeted a vulnerable population, the elderly, through its off-label promotion. The court's sentence makes clear that those who engage in such conduct will be prosecuted and held accountable," said Timothy Heaphy, U.S. Attorney for the Western District of Virginia.In addition to the criminal case, Abbott also faced a civil settlement stemming from Abbott's illegal promotion of divalproex to treat other psychiatric conditions in adults. As a result, Abbott agreed to pay $800 million to the federal government and state to "resolve claims that its unlawful marketing and illegal remuneration practices caused false claims to be submitted to government healthcare programs," the release said.

Abbott also entered into a 5-year agreement with the Officer of Inspector General of the Department of Health and Human Services, which requires increased accountability, transparency, and monitoring of activities.

------------------------------------------------------------

Check out our Facebook and Twitter pages!