State to Receive Money in Drug Company Settlement

May 8, 2012

Attorney General Jack Conway announced Monday that Kentucky has joined other states and the federal government in reaching two independent settlements totaling $1.6 billion with Abbott Laboratories to settle civil and criminal allegations that the drug company illegally marketed the drug Depakote. “I am pleased that these settlements have been reached and that we are able to recover money for a vital state program and for taxpayers,” Conway said in a press release from his office.

“These settlements should serve as a warning to other drug companies that the off-label marketing of drugs is illegal, puts the public’s health at risk and will not be tolerated.”

The states contend that from January 1998 through Dec. 31, 2008, Abbott promoted the sale and use of Depakote for so-called off-label uses - uses that were not approved by the Food and Drug Administration as safe and effective.

The $1.5 billion Medicaid settlement is the second largest recovery from a pharmaceutical company in a single civil and criminal global resolution. Abbott Laboratories will pay the 49 states, the District of Columbia 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 pleaded guilty Monday morning to a violation of the Food, Drug, and Cosmetic Act (FDCA) and agreed to pay a criminal fine and forfeiture of $700 million. Abbott Laboratories will also enter into a Corporate Integrity Agreement with the United States Department of Health and Human Services, Office of the Inspector General.

Meanwhile, Kentucky, 44 other states and the District of Columbia settled claims that Abbott’s off-label marketing and unfair and deceptive promotional practices violated Kentucky’s Consumer Protection Act. Abbott will pay $100 million to settle those claims nationally and has agreed to injunctive terms that should restrict the company’s ability to peddle Depakote for off-label uses.

Kentucky will receive a total of more than $4.6 million to settle the civil allegations against Abbott Laboratories. That includes $2.98 million in restitution and other recovery under the Medicaid settlement and $1.65 million to settle violations to Kentucky’s Consumer Protection Act.