A federal judge has made it official: Abbott Laboratories owes the government $700 million in penalties for promoting its epilepsy drug Depakote for off-label use. The formal sentencing stems from the company's $1.6 billion settlement with the Department of Justice, which also included civil penalties.
Earlier this year, Abbott ($ABT) agreed to plead guilty to a criminal misdemeanor--a misbranding charge, under the Food, Drugs and Cosmetics Act. The criminal penalties related to that charge break down this way: There's a criminal fine of $500 million. Abbott has to forfeit another $198.5 million. And it has to pay $1.5 million to Virginia' Medicaid Fraud Control Unit.
In the realm of pharma marketing settlements, Abbott's criminal penalties are second only to Pfizer's ($PFE) $1.3 billion. Though GlaxoSmithKline's ($GSK) off-label shenanigans cost the company around $3 billion in fines and civil payments, compared with Pfizer's $2.3 billion deal, the criminal portion of GSK's settlement amounted to $300 million less, or $1 billion.
The settlement amounts may vary widely, but pharma's marketing misbehavior followed a typical pattern (egregious outliers aside). Drugmakers targeted groups of patients--in Abbott's case, it was the elderly, prosecutors say--for off-label marketing. The company admitted it touted Depakote for behavioral problems in dementia patients, despite the fact that the seizure drug wasn't approved for that use.
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