Pharma giant hit with $700m fine for marketing slip-up

By James Barnes

03 October 2012 at 09:52 BST

Chicago-based health care company Abbot Laboratories has been hit with the second-largest criminal fine for a single drug, after marketing Depakote for uses that had not been approved.

Tough medicine for Abbot

Tough medicine for Abbot

Judge Samuel Wilson of the Western District of Virginia dished out a $500 million criminal fine, a forfeiture of $198.5m, and a $1.5m award to the Virginia Medicaid Fraud Control Unit, reports the Blog of Legal Times.
Depakote was promoted as being able to control behavioural disturbances in dementia patients and to treat schizophrenia. However, according to the Justice Department, these uses were not approved by the US Food and Drug Administration.

Criminal charge

The fines follow Abbott’s guilty plea to a criminal misdemeanour charge regarding the mis-branding last May. Abbott also entered a civil settlement agreement under which it agreed to pay $800m to the federal government and several states to resolve claims that its practices caused false claims to be submitted to government healthcare programmes.
Under the ruling, Abbott’s chief executive and board of directors will be required personally to certify that the company complies with the law. Enhanced accountability and transparency measures have also been agreed.

Healthcare fraud

Stuart Delery, acting assistant attorney general at the Justice Department said: ‘Today’s sentencing confirms that the resolution we reached with Abbott in May is the right result. And it emphasises the importance of the US government's co-ordinated efforts to combat healthcare fraud.’
Abbott spokesman Scott Stoffel said: ‘We're pleased to resolve this matter and look forward to the successful completion of our obligations under the agreements.’


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