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[ATG] Abbott Laboratories settles consumer suit for $1.9M, Medicaid suit for $4.9M
Start Date: 5/7/2012Start Time: 12:00 AM
End Date: 5/7/2012End Time: 11:59 PM
Entry Description

INDIANAPOLIS – Attorney General Greg Zoeller announced today that the State of Indiana will recoup millions of dollars in two separate settlements of multistate lawsuits against pharmaceutical maker Abbott Laboratories over illegal off-label marketing of its drug, Depakote.


In a case investigated by the Attorney General’s Consumer Protection Division (CPD), Indiana will receive $1,978,345 in the settlement with Abbott Laboratories, as part of a larger $100 million settlement with 44 other states and the District of Columbia that is the largest consumer protection-based pharmaceutical settlement ever reached.


Separately, the Attorney General’s Medicaid Fraud Control Unit (MFCU) today joined in a multistate settlement with other states and the federal government to resolve allegations that Abbott Laboratories engaged in illegal marketing practices involving Depakote that resulted in false claims being submitted to the Medicaid program for reimbursement. Indiana will recover a total $4,923,742.07 in the Medicaid settlement, as part of a larger $1.5 billion civil and criminal settlement between Abbott and the federal government, 48 other states and the District of Columbia. According to the U.S. Department of Justice, the $1.5 billion settlement is the second-largest recovery ever from a pharmaceutical company through a single civil-and-criminal settlement.


“Pharmaceutical companies that illegally market drugs for off-label purposes must be held accountable for their actions and this settlement should serve as a warning to others,” Zoeller said. “The substantial payments to states under these dual agreements and the marketing restrictions imposed will address many concerns identified in the parallel investigations, including prohibiting any false representation of the drug in the future.”


Each settlement was finalized and filed today in court by the Indiana Attorney General’s Office and attorney general counterparts in other states and by the DOJ against Abbott Laboratories, based in Abbott Park, Illinois.


Depakote is approved by the U.S. Food and Drug Administration for treatment of seizure disorders, mania associated with bipolar disorder and prevention of migraines. While it is not illegal for physicians to prescribe drugs for off-label uses the FDA has not approved, it is unlawful for drug companies to market drugs to doctors, healthcare providers and institutions for unapproved uses.


In a complaint filed today in the multi-state consumer-protection case along with the settlement agreement, the 45 state attorneys general including Zoeller alleged that Abbott engaged in unfair and deceptive practices when it marketed Depakote for unapproved off-label uses, including schizophrenia, agitated dementia and autism. The complaint Zoeller’s office filed today in Marion Civil Superior Court 5 alleges violations of the Indiana Deceptive Consumer Sales Act.


Similar allegations were raised in four whistleblower lawsuits filed under the False Claims Act that were consolidated into one case in U.S. District Court for the Western District of Virginia. The 49 states and federal government alleged that from January 1998 to December 2008, Abbott Laboratories misbranded Depakote by promoting the drug to control agitation and aggression in elderly dementia patients and for treating schizophrenia when neither of these uses was approved by FDA. That resulted in ineligible claims being submitted to Medicaid and other health care programs that unnecessarily reimbursed the claims.


The whistleblower lawsuits also alleged 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 remuneration to healthcare professionals and long-term care pharmacy providers to induce them to promote or prescribe Depakote.


In the $1.5 billion Medicaid fraud settlement, Abbott Laboratories will pay the states and federal government a total $800 million in civil damages and penalties to compensate Medicaid, Medicare and other healthcare programs for program funds wrongly paid out. Moreover, Abbott Laboratories pleaded guilty today to violating the federal Food, Drug and Cosmetic Act and agreed to pay a criminal fine and forfeiture of $700 million. It also must enter a corporate integrity agreement with the U.S. Department of Health and Human Services – Office of Inspector General.


Under the False Claims Act, the four whistleblowers – called “relators” – who originally filed suit and exposed fraud against government programs will receive a portion of the recovery in an amount yet to be negotiated.


Meanwhile, as a result of the states’ investigation in the consumer-protection case, Abbott has agreed to significantly change how it markets Depakote and to cease promoting off-label uses. Under the consumer-protection settlement, Abbott Laboratories is:

 • Prohibited from making false or misleading claims about Depakote;

 • Prohibited from promoting Depakote for off-label uses; and

 • Required to ensure financial incentives on sales do not promote off-label uses of Depakote.

 Also, 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;

 • Disclose payments to physicians; and

 • Register and disclose clinical trials.

 Zoeller said individual consumer claims would be handled through private class action cases.


The False Claims Act is a legal tool in federal and state law that allows whistleblowers to expose illegal conduct, stop fraud against government contracts and potentially receive a portion of any monetary recovery. Since January 2009, the Attorney General’s Medicaid Fraud Control Unit has joined in 18 settlements of whistleblower lawsuits against pharmaceutical companies for illegal off-label marketing that resulted in more than $30 million in recovery to the Indiana Medicaid program.

Zoeller and deputy attorneys general at MFCU also have led presentations to groups of health care workers to educate them about their legal right to bring whistleblower lawsuits – called qui tam lawsuits – under the False Claims Act, as part of a public-awareness effort called “Blow the Whistle on Fraud.” Members of the public who want to learn more about whistleblower lawsuits or report suspected Medicaid fraud can find more information at this link:




Contact Information:
Name: Erin Reece or Bryan Corbin
Phone: 317.232.0168
Entry Type:
Press Release
Entry Category:
  • Announcements
  • Category:
  • Family & Health
  • Government
  • Agency Name
    Attorney General

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