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By Carten Cordell | Virginia Statehouse News
ALEXANDRIA — Abbott Laboratories Inc. is expected to pony up $1.5 billion to settle a claim that it marketed a drug for improper use, the Virginia Attorney General’s Office said on Monday.
The Chicago-based health-care conglomerate pleaded guilty and agreed to pay the cash after marketing Depakote, a drug used for treating mania and seizures and preventing migraines as a medication for schizophrenia and aggression in dementia patients.
Virginia’s Medicaid Fraud Control Unit began investigating allegations that Abbott was marketing Depakote for off-label use from 1998 to 2006. The violations were not in Virginia, but because the drug was used in nursing homes and since MCFU had uncovered previous Medicaid fraud cases, the unit was notified of the violations.
Partnering with the U.S. Attorney’s Office for the Western District of Virginia, MCFU discovered violations in 26 states during its five-year investigation.
The Virginia attorney general’s office said the settlement marks the largest Medicaid fraud case investigated by a state in U.S. history.
“I’m committed to ensuring that money intended for medical services for the poor isn’t stolen from them through fraud,” Attorney General Ken Cuccinelli said in a statement. “Medicaid dollars are limited, and fraud deprives people in true need of necessary medical care.”
Of the $1.5 billion settlement, criminal charges will net $500 million in damages and $198.5 million in forfeited assets. MFCU will get $1.5 million as part of the criminal damages. Civil damages include $560.8 million paid to the federal government and $239.1 million to states agreeing to resolve claims against Abbott Laboratories, which also is subject to probation.
The settlement came just after the announcement of a separate $100 million agreement between Abbott Labs and 44 states. Virginia will receive more than $2 million, which will fund future consumer protection enforcement.
