Abbott Laboratories has pleaded guilty and agreed to pay $1.6 billion to resolve its criminal and civil liability arising from the company’s unlawful promotion of the prescription drug Depakote. The U.S. Justice Department announced the settlement on May 7th. Acting Associate Attorney General Tony West said it was a case of Abbott “putting profits ahead of patients.” The total includes a criminal fine of $700 million and civil settlements with the states and federal government totaling $800 million. Abbott pleaded guilty to a criminal misdemeanor for misbranding Depakote.
In addition to and separate from the DOJ settlement, Abbott agreed to pay 45 states a total of $100 million to resolve its liability under state consumer-protection laws. In combination, it will be the second-largest fraud settlement involving a drug company, behind only the $2.3 billion Pfizer settlement in 2010. It is the third-largest fraud settlement in a case involving the government in any field. Abbott pleaded guilty to misbranding Depakote by promoting the drug to control agitation and aggression in patients with elderly dementia and to treat schizophrenia. Neither use was approved by the Food and Drug Administration. Pfizer knew exactly what it was doing, ran the risk and made billions along the way.
Top Justice Department officials led by Deputy Attorney General James Cole were joined by Virginia state officials who began the investigation after they were approached by whistle-blowers. The federal government reportedly will receive about $560 million from the civil settlement. The total expected to be divided among all 50 states is about $240 million. The whistle-blowers will receive a total of $84 million. According to U.S. Attorney Timothy Heaphy of the Western District of Virginia, Abbott earned about $13 billion from Depakote sales during the period investigated. But Heaphy said it was difficult to determine how much of that was the result of sales for illegal purposes. Once the fines are factored in, Heaphy says Abbott will not have profited from the improper practices.
As we have written in previous issues, under the law, a drug maker’s promotional activities must be limited to uses approved by the FDA. Promotion by the manufacturer for “off-label” uses renders a product misbranded. In this case, Abbott pleaded guilty to misbranding Depakote by promoting the drug for off-label uses. Abbott will be subject to court-supervised probation and reporting obligations for the company’s CEO and board of directors. According to the Justice Department, it was unable to link the illegal prescriptions to any deaths. The drug manufacturers are willing to run the risk of getting caught when promoting and selling drugs for off-label use. When a drug company markets and sells a drug for a use that hasn’t been approved by the FDA, there can be both safety and efficacy issues. The reason drugs are not approved for certain indications is because evidence does not exist to satisfy the FDA that they are safe and effective for those purposes. It’s shocking that drug companies continue to put their profits over the welfare of the public.
Congress has allowed the powerful drug manufacturers to virtually control what happens in both the House and Senate for years. The Justice Department must continue to prosecute wrongdoers who cheat and violate the law. Congress must give the FDA the ability to get a needed job done and that’s properly regulating the powerful drug industry.
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