Abbott to pay $1.6B to wrap up Depakote marketing probe

Abbott Laboratories ($ABT) joins the gallery of $1 billion-plus marketing settlements. The drugmaker has agreed to pay $1.6 billion in fines and civil penalties to wrap up a long-running probe of its Depakote marketing. It's the second-largest off-label marketing settlement ever, topped only by Pfizer's ($PFE) $2.3 billion deal.

Abbott pleaded guilty to a single misdemeanor violation of the Food, Drug and Cosmetics Act, acknowledging that it fielded a sales force specifically trained to market Depakote in nursing homes for off-label use in elderly dementia patients. The promotions continued after adverse events prompted Abbott to stop a clinical trial testing Depakote as a dementia treatment, the Justice Department said in a statement.

The company also admitted that it promoted Depakote as an add-on therapy for schizophrenia, even after trials showed the drug offered no added benefit. The company waited two years to tell its sales force about the disappointing trial data, and another two years before publishing the results, the Justice Department statement said.

Here's how the settlement breaks down: Abbott will pay a $500 million criminal fine and forfeit $198.5 million in assets for the misbranding violation. It will also be on criminal probation for 5 years, which puts it on the hook for a laundry list of compliance reports and pledges to behave. The civil settlement amounts to $800 million, about two-thirds to be paid to the federal government and one-third to the 49 states that are part of the deal. That part of the deal covers Medicare fraud claims, additional marketing claims and kickback allegations.

- read the Justice Department statement

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