Federal and state government lawyers are trumpeting the formal resolution of a $1.6-billion case against pharmaceutical giant Abbott Laboratories Inc. for off-label marketing of its anti-seizure drug Depakote.
A federal judge in Abingdon approved a criminal sentence for Abbott today.
Various states and the federal government charged Abbott with illegally promoting the use of Depakote for Alzheimer’s and other forms of dementia even though it did not work to treat the disease.
In the criminal case, Abbott will pay a fine of $500 million, forfeit $198.5 million and pay $1.5 million to the Virginia Medicaid Fraud Control Unit, the lead investigative agency in the case. Abbott also agreed to a five-year probation term, with officials promising to personally certify every year that the company is complying with the law.
In addition, Abbott settled a parallel civil lawsuit in May with a promise to pay $800 million to the federal government and the states to reimburse government payments for off-label use of Depakote. Virginia’s share of the civil settlement is $4.2 million, according to the state attorney general’s office.
Virginia Medicaid fraud investigators spent more than four years on the Depakote case, conducting interviews in 26 states and “sifting through more than one million records” for evidence, according to the attorney general’s office.
The whistleblowers who started the investigation came to the Virginia Medicaid fraud unit because of its “national reputation for successfully investigating major national cases,” a news release said. The unit earlier investigated claims regarding the marketing and prescription of Oxycontin.
After an initial investigation, the state unit teamed up with the U.S. Attorney’s office for the Western District of Virginia to continue the investigation. The first civil action was filed in 2007.
In operation since 1982, the Virginia Medicaid Fraud Control Unit has grown from 56 to 86 staffers in the past two years under Attorney General Ken Cuccinelli.