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Federal court OKs $1.5B Abbott Labs settlement

Tuesday - 10/2/2012, 5:12pm  ET

ABINGDON, Va. (AP) - A federal court in Virginia on Tuesday approved a settlement in which Abbott Laboratories agreed to pay $1.5 billion over allegations that it promoted the anti-seizure drug Depakote for uses that were not approved by the Food and Drug Administration.

Abbott agreed in May to pay a criminal fine and forfeiture of $700 million and settlements with the federal government and states totaling $800 million. The settlement was approved Tuesday in U.S. District Court in Abingdon. Virginia will receive $4.2 million from the civil settlement.

Depakote is an anti-seizure and mood-stabilizing drug prescribed for bipolar disorder. However, the company admitted that it marketed the drug for unapproved uses, including treatment of schizophrenia, agitated dementia and autism.

The company admitted that it trained a specialized sales force to promote Depakote in nursing homes for treating dementia because the drug was not subject to federal regulations designed to prevent the use of unnecessary medications in nursing homes.

The company also marketed Depakote to treat schizophrenia. Clinical trials failed to demonstrate that adding Depakote was any more effective than antipsychotic drugs in treating schizophrenia, according to court papers in the case.

Under the care of a physician, patients are sometimes prescribed drugs for purposes not approved by the FDA. However, pharmaceutical companies cannot market drugs for unapproved purposes.

Virginia Attorney General Ken Cuccinelli said he'd beefed up his office's Medicaid Fraud Control Unit by 30 people over the last two years particularly for cases such as this one. The agency took the lead in the case, and Cuccinelli said it was the largest Medicaid fraud recovery in U.S. history resulting from a state-led investigation.

Federal prosecutors accused the company of targeting "a vulnerable population."

"We expect companies to make honest, lawful claims about the drugs they sell, we will be vigorous in our enforcement efforts when they break the law, and the courts will hold them accountable," Stuart F. Delery, Acting Assistant Attorney General for the Justice Department's Civil Division, said in a release.

The Illinois-based company has said it was pleased to resolve the matter. Under the settlement, it agreed to enter a five-year probationary period designed to ensure that there is no further misconduct.

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