Reuters: Regulatory News: UPDATE 1-Abbott to pay $1.6 bln for Depakote marketing

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UPDATE 1-Abbott to pay $1.6 bln for Depakote marketing May 7th 2012, 18:06 Mon May 7, 2012 2:06pm EDT * Settles civil, criminal charges from US, 49 states * Abbott to plead guilty to one misdemeanor * Charges involve promoting Depakote for unapproved uses * Enters Corporate Integrity agreement for 5 years * Shares rise 0.4 percent May 7 (Reuters) - Abbott Laboratories Inc said on Monday it agreed to pay $1.6 billion to resolve civil and criminal allegations related to the promotion of anti-seizure drug Depakote for unapproved uses. The diversified healthcare company has also agreed to plead guilty to one misdemeanor violation of the Food, Drug and Cosmetic Act for misbranding, and to enter into a Corporate Integrity Agreement with the U.S. government that will oversee Abbott's compliance program for five years. The settlement resolves the Depakote matter with the federal government, as well as 49 states and the District of Columbia, Abbott said. Under terms of the settlements, Abbott will pay $800 million to resolve state and federal civil charges, a $700 million criminal penalty and $100 million to states to resolve consumer protection matters. Abbott pleaded guilty to promoting the drug for unapproved uses, including to control agitation and aggression in elderly patients who suffered from dementia and to treat schizophrenia, "despite the absence of credible scientific evidence that Depakote was safe and effective for that use," the U.S. Justice Department said. "We are resolute in stopping this type of activity and today's settlement sends a strong message to other companies," Deputy Attorney General James Cole said in a statement. The U.S. Justice Department called the resolution the second largest payment by a drug company after a $2.3 billion settlement Pfizer Inc paid for similar marketing practices with its drugs. Abbott said it had previously set aside the funds in anticipation of the settlement, which relates to a four-year-old investigation of Depakote sales and marketing practices dating back to 1998 and running through 2006. While doctors are free to prescribe drugs any way they see fit, drugmakers are only allowed to promote them for uses approved by the U.S. Food and Drug Administration. "We are pleased to resolve this matter and are confident we have the programs in place to satisfy the requirements of this settlement," Laura Schumacher, Abbott's General Counsel, said in a statement. Abbott shares were up 27 cents at $62.68 in afternoon trading on the New York Stock Exchange Link this Share this Digg this Email Reprints

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