Depakote Marketing Charges May be Nearing Settlement

Abbott Laboratories appears to be preparing to settle federal charges that it illegally promoted off-label uses of <"">Depakote. According to a report from The Wall Street Journal, the company recorded a $1.5 billion charge for the third quarter to cover the potential Depakote settlement with the U.S. Department of Justice.

Depakote, know generically as valproic acid, is approved to treat seizures, and manic or mixed episodes associated with bipolar disorder, and to prevent migraine headaches. Depakote is also used off-label (for unapproved uses) for other conditions, particularly for other psychiatric conditions. While doctors are free to prescribe drugs for off-label uses, drug makers are legally prohibited from marketing medications based on unapproved uses.

As we’ve reported previously, the Justice Department has been investigating Abbott over allegations that it marketed Depakote for unapproved uses, including as a treatment for autism, sexual compulsions, and agitation and aggression in the elderly. The investigation was spawned by four whistleblower lawsuits filed by current and former Abbott employees who claimed the company began off-label marketing in Depakote beginning in the late 1990s, causing false claims for prescription reimbursement to be submitted to Medicaid and other government health programs, the Journal said. Under state and federal whistleblower laws, the filers of the suits may be able to share in a portion of any settlement reached between Abbott and the Justice Department.

According to a report from The Pharma Times, the Justice Department’s Depakote marketing investment is not concluded, so its outcome is still unclear. However, if the investigation does end with a $1.5 billion settlement with Abbott, the payment would represent the second largest healthcare fraud penalty ever levied by the Justice Department. The largest so far was Pfizer’s $2.3 billion fine for the illegal promotion of a number of drugs in September 2009.

Other recent settlements with pharmaceutical companies involving charges of illegal off-label promotion include Eli Lilly & Co.’s payment of $1.4 billion to resolve charges it marketed the antipsychotic Zyprexa for unauthorized uses. Last year, Johnson & Johnson agreed to pay $81 million and to plead guilty to a criminal misdemeanor to settle allegations that it promoted Topamax for off-label psychiatric uses, according to The Wall Street Journal.

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