What’s the price of defrauding state and federal healthcare systems and potentially putting thousands of patients at risk? In the case of Abbott Laboratories and its CEO, Miles D. White, it’s a slap on the wrist and a fine that represents a small percent of giant profits made by pushing a prescription drug for off-label and unapproved purposes.
According to Dow Jones Newswires, the U.S. Justice Department declined to intervene in whistleblower allegations that White engaged in “unlawful conduct” and personally gained from his corporation’s illegal promotion of its anti-seizure drug Depakote.
A former Abbott employee made the allegations against White in a lawsuit filed two years ago, but they remained sealed until a couple weeks ago. However, those claims against White were dismissed as part of a $1.6 billion agreement between Abbott and the U.S. government to settle matters related to the company’s unlawful marketing of Depakote.
Earlier, a federal judge in Virginia formally sentenced Abbott to a fine and forfeiture of nearly $700 million for “misbranding” Depakote between 1998 and 2006. Abbott had previously pleaded guilty to misdemeanor criminal charges, but White was never charged with wrongdoing.
According to the Justice Department, Abbott illegally and aggressively pushed Depakote for unapproved uses over several years starting in 1998 when it established and trained a specialized sales force to market the drug in nursing homes for the treatment of agitation and aggression in elderly dementia patients. This practice continued for several years, even after Abbott was forced to discontinue a clinical trial of Depakote for dementia patients in 1999 when several patients began experiencing a number of adverse reactions.
Additionally, from 2001 through 2006, Abbott marketed Depakote as an effective treatment for schizophrenia, even after its own studies found that Depakote wasn’t effective in treating the condition. In fact, after Depakote failed the schizophrenia trials, Abbott waited two years to inform its sales force of those results and another two years to publish them. Meanwhile, the company continued to promote the drug as an effective schizophrenia treatment.
According to U.S. Attorney Timothy Heaphy of the Western District of Virginia, Abbott made about $13 billion off of Depakote sales during the period it misbranded the top-selling drug and pushed it as an effective treatment for patients who didn’t need it.
That likely means Abbott’s unlawful activities paid off, enriching not just the company but allegedly White himself, who, as the whistleblower lawsuit alleges, “was aware of and sanctioned” his company’s illegal Depakote marketing, including supporting the division of the company whose primary purpose was to sell Depakote to nursing homes for off-label purposes.
In the end, the U.S. Justice Department’s settlement with Abbott proves only one thing: that fraudulently marketing drugs for unapproved purposes and endangering countless thousands of patients is an excellent business model for pharmaceutical companies to emulate.