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Whistleblower Suit Causes Abbott to Repay $1.5 Billion and Plead Guilty to Misbranding Depakote

May 8, 2012

Abbott Laboratories Inc. made untold amounts of money by misbranding and marketing anti-pshychotic Depakote.  Now, it will repay $800 million to the federal government and the states, including $84 million to the whistleblowers who alerted officials of the fraud.  Additionally, Abbott will pay a criminal fine and forfeiture of $700 million and agree to court-supervized probation and reporting obligations for its board of directors and CEO — for a total of $1.5 billion.

Depakote is only approved for the very limited use in treating epileptic seizures, bipolar mania and migraines, but Abbott entered into agreements with nursing homes and others and marketed it to seniors, veterans, children and their physicians for a kitchen sink of ailments, including: dementia, psychiatric conditions in children and adolescents, schizophrenia, depression, anxiety, conduct disorders, obsessive-compulsive disorder, post-traumatic stress disorder, alcohol and drug withdrawal, attention deficit disorder, and autism. 

According to the guilty plea, DoJ reports that Abbott admits that:

“[F]rom 1998 through 2006, the company maintained a specialized sales force trained to market Depakote in nursing homes for the control of agitation and aggression in elderly dementia patients, despite the absence of credible scientific evidence that Depakote was safe and effective for that use.   In addition, from 2001 through 2006, the company marketed Depakote in combination with atypical antipsychotic drugs to treat schizophrenia, even after its clinical trials failed to demonstrate that adding Depakote was any more effective than an atypical antipsychotic alone for that use.”

Apparently the clinical trials didn’t just fail — Abbott was forced to discontinue the trial for dementia in 1999 “due to an increased incidence of adverse events, including somnolence, dehydration and anorexia experienced by the elderly study participants administered Depakote,” reports DoJ.

Abbott’s sales force was trained to promote the off-label use of Depakote, despite its apparent harm to the elderly, to end-run OBRA restrictions that apply to other medications “to  help nursing homes avoid the administrative burdens and costs” of compliance.

“Not only did Abbott engage in off-label promotion, but it targeted elderly dementia patients and downplayed the risks apparent from its own clinical studies,” said Acting Associate Attorney General Tony West.  “As this criminal and civil resolution demonstrates, those who put profits ahead of patients will pay a hefty price.”

Likewise, Abbott promoted Depakote off label for schizophrenia even though the drug specifically failed in two separate trials — shielding the trial results from its sales team for almost two years and waiting four years before publishing the results.

“Crimes involving the misbranding of drugs for financial gain will not be tolerated,” stated Richard Weber, Chief IRS Criminal Investigation.  “The special agents of IRS Criminal Investigation will use all their investigative tools, including the use of asset forfeiture statutes, to combat financial crimes and hold corporations accountable for their actions.”

To report Medicare Fraud, contact Frohsin & Barger.

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