U.S. District Judge Virginia Kendall recently upheld a shareholder derivative complaint against Abbott Laboratories for its off-label marketing of the drug Depakote.
Physicians are allowed to prescribe drugs for off-label uses, but drug companies are not permitted to market drugs except for approved uses. Depakote is approved by the U.S. Food and Drug Administration (FDA) for three uses: to treat epileptic seizures, to treat bipolar mania, and to prevent migraine, according to the FDA. But Depakote (divalproex) has never been approved to treat schizophrenia or aggression in patients with dementia, though off-label prescriptions for these conditions have become common, Courthouse News Service reports.
Beginning in 2007, four Abbott sale representatives filed whistleblower suits alleging that the company had trained sales reps to market Depakote for off-label uses. They also alleged that Abbott downplayed the drug’s side effects, including a significant risk of birth defects, Courthouse News Service reports. With Justice Department intervention, Abbott settled the cases for $1.5 billion. In announcing the 2012 settlement, the Justice Department said, “A company’s promotional activities must be limited to only the intended uses that FDA approved.”
The first complaint brought by Abbott shareholders was dismissed last year, but they filed an amended complaint, which incorporated government allegations from the civil settlement with Abbott, according to Courthouse News Service. Based on the government’s contentions, Judge Kendall found it plausible that Abbott had continued to illegally market Depakote for off-label uses, and that illegal kickbacks, such as sports tickets, dinners, and consulting agreements, had not ended in 2006, but had continued through 2008.
Courthouse News Service reports that Abbott also faces a consolidated personal injury lawsuit on behalf of hundreds of consumers who claim Depakote caused their children’s birth defects.