AG Coakley Reaches Two Multi-State Settlements With Abbott Laboratories Worth Nearly $900 Million
Largest State Consumer Protection Prescription Drug Settlement for Illegal Marketing of Depakote; Massachusetts to Receive Total Of $19.8 Million
BOSTON – Resolving allegations of illegal off-label marketing of the drug Depakote, Abbott Laboratories reached two separate multi-state settlements with Massachusetts and other states worth nearly $900 million, Attorney General Martha Coakley announced today. Under these settlements the Commonwealth will receive $19.8 million from Abbott.
“When pharmaceutical companies market drugs for uses that have not been shown to be safe or effective, they put consumers at risk and increase health care costs,” Attorney General Martha Coakley said. “These settlements help ensure that consumers will be protected from misleading marketing that can result in the unnecessary and unsafe use of prescription drugs.”
The first settlement resulted from a federal and state enforcement action filed under the False Claims Act and resolves civil and criminal allegations of illegal marketing of the anti-seizure medication Depakote for off-label uses by Abbott Laboratories over a ten-year period. Abbott Laboratories will pay the states and federal government $800 million in civil damages and penalties to compensate Medicaid, Medicare, and various federal healthcare programs for harm suffered as a result of the alleged conduct. The total value of the civil settlement to the Massachusetts Medicaid program is more than $17.8 million. In addition to the multi-state settlement, Abbott will also pay the federal government a criminal fine and forfeit an additional $700 million.
The second settlement resulted from a separate multi-state consumer protection action involving 44 other states and the District of Columbia and is considered the largest state consumer protection-based pharmaceutical settlement ever reached.
Under this separate consumer protection settlement, Abbott Laboratories will pay the states an additional $100 million including approximately $2 million to the Commonwealth. The consent judgment detailing violations to the state consumer protection statute through the illegal marketing of Depakote was filed today in Suffolk Superior Court along with the AG’s complaint. Approximately $100,000 from the settlement will pay for attorneys’ fees and investigative costs while the remaining funds will pay for programs that lower health care costs for Massachusetts residents, combat unlawful marketing practices in the health care market, or otherwise benefit health care consumers in Massachusetts.
Under the consent judgment Abbott Laboratories is:
- prohibited from making false or misleading claims about Depakote;
- prohibited from promoting Depakote for off-label uses;
- required to ensure financial incentives on sales do not promote off-label uses of Depakote;
- for a five-year period, comply with certain limitations to its dissemination of non-promotional material, reprints of clinical studies, use of grants and Continuing Medical Education programs concerning Depakote, and;
- for a five-year period, disclose payments to physicians and register and disclose clinical trials concerning Depakote.
The AG’s complaint alleges that Abbott engaged in unfair and deceptive practices when it marketed Depakote for uses that had not been approved by the U.S. Food and Drug Administration. Depakote is approved for treatment of seizure disorders, mania associated with bipolar disorder and prophylaxis of migraines but it is alleged Abbott marketed the drug for treating unapproved uses, including schizophrenia, agitated dementia and autism.
Assistant Attorney General George Zachos of AG Coakley’s Medicaid Fraud Division, Assistant Attorney General Courtney Schou of the AG’s Health Care Division and Data Analyst Anthony Megathlin of the Medicaid Fraud Division handled the settlements for the Commonwealth.