Abbott Laboratories ($ABT) has set aside $1.5 billion for a potential off-label marketing settlement with the U.S. Justice Department. Amid all the excitement about Abbott Laboratories' impending split into two companies, the legal charge hasn't attracted much attention. But if it does amount to $1.5 billion, it would rank as the second-biggest off-label settlement in history, outranked only by Pfizer's ($PFE) $2.3 billion deal.
The potential deal would resolve a longstanding investigation into Abbott's Depakote promotions and wrap up negotiations that have been going on at least since the spring. The Justice Department disclosed in court documents this June it was in active talks with Abbott to wrap up the Depakote probe.
Whistleblower lawsuits joined by the feds allege Abbott pushed the epilepsy drug, which is also approved for bipolar mania and migraine prevention, for a variety of unapproved uses. The company touted Depakote as a treatment for autism, sexual compulsions, agitated and aggressive dementia patients, and other conditions, the whistleblowers claim. The unapproved uses were promoted in a variety of U.S. healthcare settings, including long-term care and assisted-living facilities.
Although off-label marketing settlements have become commonplace in the drug industry, recent deals have been comparatively small. Johnson & Johnson ($JNJ) recently agreed to pay $81 million to wrap up a Risperdal marketing probe. But a series of large settlements came down in 2008, 2009 and early 2010, including Pfizer's $2.3 billion settlement of claims that it promoted Bextra and several other drugs for unapproved uses. Eli Lilly's ($LLY) $1.4 billion Zyprexa settlement currently stands as the second-biggest, with Allergan's ($AGN) $600 million Botox settlement in third place and AstraZeneca's ($AZN) $520 million Seroquel settlement in fourth.
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