Abbott Laboratories (ABT: Quote) Monday reached a settlement with U.S. authorities to resolve all outstanding issues regarding a probe of past sales practices relating to its neurologic medication Depakote.
As part of the settlement, 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. Abbott said the amounts were earlier reserved in anticipation of today's agreement.
Abbott said the settlement with federal and 49 state authorities, plus the District of Columbia, results from a four-year-old investigation into past sales activities that began in 1998 involving Depakote.
The settlement is subject to approval by the Federal Court in the Western District of Virginia.
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.
Abbott is to separate into two publicly traded companies by year's end. The company said 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, or 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.
 | | To receive FREE breaking news email alerts for Abbott Laboratories and others in your portfolio |
|
by RTT Staff Writer
For comments and feedback: editorial@rttnews.com
Business News