A.G. Schneiderman Announces $54 Million Settlements With Pharmaceutical Giant Abbott Laboratories For Deceptive Practices

$50 Million To Resolve Civil and Criminal Allegations That Abbott Illegally Marketed "Depakote"

$4 Million To End Deceptive Advertising Practices & Off-Label Promotion Of Anti-Seizure Drug

NEW YORK -- Attorney General Eric T. Schneiderman today announced two separate settlements with Illinois-based pharmaceutical giant Abbott Laboratories regarding the marketing and sale of the anti-seizure drug Depakote for unapproved uses. The first is a $1.5 billion global settlement with other states and the federal government to settle civil and criminal allegations that Abbott Laboratories illegally marketed Depakote with New York's share being $50 million. The second is a $100 million settlement reached by Attorney General Schneiderman along with 44 other State Attorneys General and the District of Columbia arising from alleged improper marketing and promotion of the anti-seizure drug Depakote. It is the largest ever multi-state consumer protection-based pharmaceutical settlement. New York’s share of the consumer-related settlement is nearly $4 million.

“New York consumers should not have to put their health put at risk as a result of the illegal promotion of drugs for off-label uses by pharmaceutical companies," said Attorney General Schneiderman. "Consumers should be able to rely on their doctor’s advice for prescriptions without having to worry that their doctors have been manipulated by pharmaceutical companies."

For the $1.5 billion settlement, the states contend that from January 1998 through December 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.

The $1.5 billion settlement is the second largest recovery from a pharmaceutical company in a single civil and criminal global resolution. 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.

This multi-state settlement is based on four qui tam cases that were consolidated and are pending in the United States District Court for the Western District of Virginia in Abingdon, Virginia. The cases were filed under Federal and State false claims statutes.

In the second settlement, Attorney General Schneiderman alleged that Abbott Laboratories engaged in deceptive and misleading practices when it marketed Depakote for off-label uses. As a result of the states' investigation, Abbott Laboratories agreed to change its marketing of Depakote and to cease promoting “off-label” uses of the drug, which are not approved by the U.S. Food and Drug Administration (FDA). Depakote is approved for treatment of seizure disorders, mania associated with bipolar disorder and prophylaxis of migraines, but Attorney General Schneiderman alleged that Abbott marketed the drug for treating unapproved uses, including schizophrenia, agitated dementia and autism.

Under the settlements, Abbott Laboratories is:
• Prohibited from making false or misleading claims about Depakote;
• Prohibited from promoting Depakote for off-label uses; and,
• Required to ensure financial incentives on sales do not promote off-label uses of Depakote.

In addition, for a five-year period, Abbott must:
• Limit distribution of medical information provided in response to requests by physicians and health care professionals, including information about off-label uses of Depakote, to ensure that materials are presented in an unbiased, non-promotional and scientifically balanced manner;
• Limit dissemination of reprints of clinical studies relating to off-label uses of Depakote;
• Limit use of grants and Continuing Medical Education (CME) to market Depakote;
• Disclose annually on its website Depakote-related CME grants to physicians in amounts over $200; and
• Register and disclose clinical trials regarding Depakote.

A state team appointed by the National Association of Medicaid Fraud Control Units participated in the investigation and conducted the settlement negotiations with Abbott on behalf of the participating states. Team members include representatives from the Offices of the Attorneys General for the states of California, Georgia, Illinois, Massachusetts, Maryland, South Carolina, Ohio and Virginia.

The Attorney General’s Medicaid Fraud Control Unit led the state’s investigation and represented the state’s interest in the resolution, led by Special Assistant Attorney General Sherrie Brown and Elizabeth Silverman, Carolyn Pollard, Deputy Director of the Electronic Investigative Support Group, Supervising Special Auditor Investigator Stacey Millis, and Medical Analyst Stephanie Keyser. This portion of the investigation was conducted under the supervision of Assistant Deputy Attorney General Paul Mahoney and Special Deputy Attorney General Monica Hickey-Martin.

The consumer case was handled by Assistant Attorney General Benjamin J. Lee under the supervision of Laura J. Levine, Deputy Bureau Chief, and Jane M. Azia, Bureau Chief of the Consumer Frauds and Protection Bureau and Executive Deputy Attorney General for Economic Justice Karla G. Sanchez.

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