Drug fraud settlement will net Minn. $4.5M

  • Article by: BRAD SCHRADE , Star Tribune
  • Updated: October 23, 2012 - 7:40 PM

Abbott Labs admitted to illegal marketing of an anti-psychotic drug. Total payout across U.S. is $1.6 billion.

Minnesota will collect $4.5 million as part of a national fraud settlement against an Illinois pharmaceutical company that illegally marketed a powerful anti-psychotic drug to treat seniors.

The payment by Abbott Laboratories Inc. is part of a $1.6 billion settlement that includes criminal and civil liability payments to the federal government, 49 states and the District of Columbia. Federal officials in May said it was the second-largest payment of its kind by a drug company.

The drugmaker admitted to violating federal law from 1998 to 2006 when it had a special sales team to market the drug Depakote to nursing homes as a way to treat agitation and aggression among elderly dementia patients, even though federal regulators had not approved the drug for that purpose, according to a U.S. Justice Department release. The Food and Drug Administration had limited approval for the drug to treat epileptic seizures, bipolar disorder and migraine headaches.

Minnesota's share of the settlement is based on the amount of the drug used by patients in the state's Medicaid program, known as Medical Assistance, and other taxpayer-funded programs.

Minnesota's total recovery is $9 million, according to a release Tuesday, but half will go to the federal government to cover its portion of the payments to those programs.

"Fraud hurts all of us," said Jerry Kerber, inspector general with the Minnesota Department of Human Services. "Minnesota deserves to know that their public health care dollars are going for care to our fellow Minnesotans, not lining the pockets of irresponsible pharmaceutical companies."

Abbott spokesman Scott Stoffel said the company had discontinued the marketing program before it was notified of the federal investigation. Part of the settlement includes a five-year corporate integrity agreement that will involve monitoring by the company's board of directors to ensure its compliance program is working.

"Abbott takes our responsibility to our patients and health care providers very seriously and has comprehensive compliance and training programs," Stoffel said.

Brad Schrade • 612-673-4777

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