Drug maker Abbott Laboratories (ABT) pleaded guilty and agreed to pay a total of $1.6 billion to settle the criminal and civil claims that arose from past unlawful promotion of neurologic drug Depakote.
Abbott promoted Depakote for uses not approved as safe and effective by the Food and Drug Administration (FDA). The drug was promoted to control agitation and aggression in elderly dementia patients and to treat schizophrenia when neither of these uses were approved by FDA.
The Abbott Park, Illinois-based company 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 issues related to consumer protection.
The settlement follows a four-year-old investigation into past sales activities by Abbott that began in 1998 involving Depakote.
Abbott has also agreed to maintain specified compliance measures and annual certification regarding its state of compliance by its CEO and Board of Directors during a five-year probationary period.
"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 Schumacher, executive vice president, General Counsel.
"Today's settlement shows further evidence of our deep commitment to public health and our determination to hold accountable those who commit fraud," said James Cole, Deputy Attorney General. "We are resolute in stopping this type of activity and today's settlement sends a strong message to other companies."
ABT is currently trading at $62.71, up $0.30 or 0.49%, on a volume of 6.7 million shares on the NYSE.
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