TRENTON – The Office of the Attorney General announced May 7 that New Jersey has joined a multi-state settlement with pharmaceutical manufacturer Abbott Laboratories that resolves both criminal and civil allegations the company deceptively marketed its drug Depakote.
Abbott will pay the states and the federal government a total of $800 million in damages and penalties to compensate Medicaid, Medicare and various federal health care programs for harm suffered as a result of its conduct. As part of this civil resolution, New Jersey will receive $7.1 million in restitution and other recovery.
The civil settlement is based on four cases that were consolidated and are pending in U.S. District Court for the Western District of Virginia in Abingdon, Va. The cases were filed under both federal and state false claims statutes. In addition to the civil settlement, Abbott pleaded guilty May 7 to a violation of the federal Food, Drug and Cosmetic Act and agreed to pay a federal fine and forfeiture of $700 million.
Under the civil consumer protection aspect of the national settlement, New Jersey will receive approximately $2.3 million, and the Illinois-based Abbott will be restricted from marketing Depakote for off-label uses – uses not approved by the federal Food and Drug Administration (FDA).
Forty-four other states and the District of Columbia also are party to the global settlement, described as the largest-ever multi-state pharmaceutical settlement. Nationally, Abbott will pay all participating states a total of $100 million to resolve civil allegations related to deceptive marketing. In addition, Abbott has entered into a separate settlement with the federal government related to the civil allegations.
Depakote is approved by the FDA for treating seizure disorders, as well as for the treatment of mania associated with bipolar disorder and prophylaxis of migraine headaches. However, Abbott promoted Depakote for non-approved uses such as treatment of schizophrenia, agitated dementia and autism.
A civil Complaint, filed in New Jersey Superior Court May 7 along with a Final Consent Judgment memorializing the multi-state settlement, alleges that Abbott engaged in unconscionable commercial practices when it marketed Depakote for such off-label uses. The Complaint also alleges that Abbott engaged in off-label marketing of Depakote despite clinical evidence suggesting the drug was ineffective when administered for some of the off-label purposes it was promoting.
In addition to the monetary terms of the civil settlement, the agreement with Abbott includes a number of provisions designed to prevent the future promotion of Depakote for off-label uses including:
• A prohibition against Abbott making any written or oral claim that is false, misleading or deceptive regarding the drug
• A prohibition against promoting Depakote for off-label uses of any kind.
• A requirement that the compensation of Abbott sales representatives be designed to ensure there are no financial incentives tied to their promoting of Depakote for off-label use.
In addition to New Jersey, the following states and the District of Columbia participated in the global settlement: Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Florida, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia and Wisconsin.
