Settlements involving consumer protection, Medicaid claims over illegal marketing of Depakote
SEATTLE – Working with other states, attorneys for the Washington State Attorney General’s Office have recovered more than $12 million through settlements with Illinois-based Abbott Laboratories, accused of illegally marketing an anti-seizure drug. The state will recover more than $10 million, split with the federal government, in a multi-state Medicaid fraud case against the company and more than $2 million from a consumer protection case.
“Both consumers and our state's Medicaid program were harmed by the illegal marketing of Depakote,” said Washington State Attorney General Rob McKenna. “We’re pleased that Abbott Labs is paying millions to resolve both sets of claims.”
Depakote is FDA-approved for treatment of seizure disorders, symptoms of manic depression and the prevention of migraines. The states allege Abbott defrauded the Medicaid program and engaged in unfair and deceptive practices when it marketed Depakote for off-label uses, such as for the treatment of schizophrenia, agitated dementia and autism.
Washington state joined with other states and the federal government to reach an agreement with Abbott Laboratories settling civil and criminal allegations that the company illegally marketed Depakote. As part of the settlement, Washington state will receive $10,266,515 in restitution and other recoveries. About half of the proceeds are returned to the federal government to cover its share of spending on the drug in Washington state. Remaining proceeds are split between the Medicaid program and the general fund. Settlement payments in drug cases are based on the number of drugs sold in the state during the time in question
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 as safe and effective by the Food and Drug Administration (FDA). The alleged conduct resulted in medical professionals prescribing the drug to Medicaid patients when they wouldn’t have otherwise done so. Government attorneys also claim 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 fees to health care professionals and long-term care pharmacy providers to encourage them to promote and/or prescribe the drug.
The $1.5 billion national settlement is the second largest recovery from a drug company in a single civil and criminal settlement. Abbott 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.
A total of 49 states, plus the District of Columbia, are participating in the Medicaid settlement. Abbott also settled a separate case pressed by state attorneys general related to individuals not covered by Medicaid.
Consumer protection case
In a complaint filed today along with the settlement agreement, the states allege Abbott engaged in unfair and deceptive practices when it marketed Depakote for off-label uses. Illegal marketing tactics listed in court documents include:
- The company’s distribution of studies that showed Depakote was effective to treat conditions for which it was not approved;
- Abbott-sponsored continuing medical education courses in which speakers were selected based on their willingness to promote off-label uses for the drug;
- Abbott’s conducting of a study relating to the treatment of schizophrenia: even though the study showed Depakote to be ineffective, the company failed to disclose the results in a timely fashion;
- The continued promotion of Depakote to treat agitation related to dementia, even after company representatives knew about a clinical trial that found Depakote to be ineffective.
McKenna today announced Washington state joined 45 other states and the District of Columbia in a $100 million consumer protection settlement with the drug maker. Washington state’s share is $2,015,000.
McKenna indicated to the court that settlement funds will be used to provide direct treatment, medication or counseling to people suffering from schizophrenia, dementia or autism. An open and competitive grant process for nonprofit organizations or agencies will be used to determine the recipients.
“This settlement is a reminder that individuals suffering from schizophrenia, dementia and autism – and their families – seek medications that might provide relief,” McKenna said. “Abbott Laboratories sought to exploit that need. And that is why we’re setting this money aside to help the same people who still seek relief."
Under the settlement, Abbott Laboratories is prohibited from making false or misleading claims about Depakote, promoting the drug for off-label uses, and they are also required to ensure financial incentives on sales do not promote off-label uses.
In addition, for a five-year period, Abbott must:
- Limit the creation and use of responses to requests by physicians for non-promotional information about off-label uses of Depakote;
- Limit dissemination of reprints of clinical studies relating to off-label uses of Depakote;
- Limit use of grants and continuing medical education courses;
- Disclose of payments to physicians, and;
- Register and disclose clinical trials.
Attorneys General of the District of Columbia and the following states participated in today’s settlement: Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Florida, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia and Wisconsin.
Janelle Guthrie, Director of Communications, (360) 586-0725