The case includes a criminal fine and forfeiture of $700 million and civil settlements with the federal government and states totalling $800 million. Deputy Attorney General James Cole said Monday the settlement reflects the determination by government "to hold accountable those who commit fraud."
At a news conference at the Justice Department, U.S. Attorney Timothy Heaphy said that the top levels of Abbott carried out a strategy of systematically marketing the drug for purposes other than what federal regulators had allowed.
The illegal conduct was not the product of "some rogue sales representatives," said Heaphy, the U.S. attorney for the western district of Virginia. He said the company engaged in the strategy from 1998 to at least 2006.
Separately, Virginia Attorney General Ken Cuccinelli announced a $100 million settlement with Abbott of consumer claims in 45 states and the District of Columbia. The consumer claims over Abbott's promotion of Depakote for unapproved uses were brought under the Virginia Consumer Protection Act.
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 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.
Illinois-based Abbott said the company was pleased to resolve the matter. It said that it takes its responsibility to patients and health care providers seriously. Under the settlement, the company has agreed to enter a five-year probationary period designed to ensure that there is no repeat of the company's misconduct.
Reuben Guttman, an attorney whose whistleblower clients brought Abbott's activities to the attention of government investigators, said that the case shows how a company elevated aggressive sales and marketing of Depakote over medical decision-making. Abbott, said Guttman, "violated basic norms of health care and ethics."