Abbott has reached a settlement with U.S. federal and 49 state authorities, plus the District of Columbia, to resolve all outstanding issues regarding a previously disclosed investigation of past sales and marketing practices relating to its neurologic medication Depakote. The settlement results from a four-year-old investigation into past sales activities that began in 1998 involving this product. Abbott cooperated fully with the government during its investigation.
Abbott will pay $800 million to resolve civil allegations split among federal and state governments, $700 million for a criminal penalty, and $100 million to states to resolve consumer protection matters. These amounts were previously reserved in anticipation of today's agreement.
As part of the resolution, Abbott has agreed to plead guilty to one misdemeanor violation of the Food, Drug and Cosmetic Act for misbranding. The company also agreed to certain other conditions of settlement, including the maintenance of specified compliance measures and annual certification regarding its state of compliance by its CEO and Board of Directors during a five-year probationary period.
The company has announced plans to separate into two publicly traded companies by year's end. The compliance measures and certification requirements will transfer to the research-based pharmaceutical company, AbbVie, upon separation, as the obligations relate to the U.S. pharmaceutical business.
Abbott will also enter into a Corporate Integrity Agreement (CIA) with the Office of Inspector General of the U.S. Department of Health and Human Services. The CIA will govern Abbott's compliance program for a period of five years and builds upon the company's existing comprehensive compliance program. The CIA will also transfer to AbbVie upon separation.
"We are pleased to resolve this matter and are confident we have the programs in place to satisfy the requirements of this settlement," said Laura J. Schumacher, executive vice president, General Counsel. "The company takes its responsibility to patients and health care providers seriously and has established robust compliance programs to ensure its marketing programs meet the needs of health care providers and legal requirements."
The settlement is subject to approval by the Federal Court in the Western District of Virginia.