Bloomberg News

Abbott Labs Accused of Racketeering in Depakote Marketing Suit

August 16, 2013

Abbott Laboratories (ABT:US) allegedly engaged in racketeering when it led an effort to market the epilepsy drug Depakote for unapproved uses, according to a federal court complaint filed in Chicago.

The pharmaceutical company last year agreed to pay $1.6 billion to settle state and federal claims it promoted the drug’s use to treat bi-polar mania and to prevent migraine headaches.

“Unfortunately, these sanctions were insufficient to compensate” for harm caused to injured claimants, according to today’s complaint by three health-benefit plans seeking to represent those claimants as a group.

“Abbott probably calculated both its risk of being caught and its potential civil and criminal exposure assuming its only liability would be to the Medicare, Medicaid and Tricare systems,” the plans alleged, referencing government health benefit programs for the elderly, the indigent, and those in the armed forces.

Last year’s settlement resolved a four-year investigation into the sales practices of the Abbott Park, Illinois-based company.

In addition to its agreement to pay $800 million to resolve civil claims and a $700 million criminal penalty, Abbott said it would pay $100 million to states to resolve consumer protection matters.

Federal Racketeering

Scott E. Stoffel, a company spokesman, didn’t immediately respond to voice-mail messages seeking comment on today’s allegations.

The plaintiffs are the Sidney Hillman Health Center of Rochester, New York, the Teamsters Health Services & Insurance Plan Local 404 in Springfield, Massachusetts, and Park Ridge, Illinois-based United Food & Commercial Workers Unions and Employers Midwest Health Benefits Fund, each of which allegedly paid for its beneficiaries’ use of Depakote.

Alleging violations of federal racketeering and of being unjustly enriched, the plaintiffs are seeking unspecified money damages.

Chicago federal court Judge Virginia Kendall in June denied a defense request to dismiss a 2011 lawsuit accusing company directors including Chairman Miles D. White of shirking their responsibility to supervise marketing of the drug.

The case is Sidney Hillman Health Center of Rochester, 13-cv-05865, U.S. District Court, Northern District of Illinois (Chicago).

To contact the reporter on this story: Andrew Harris in the Chicago federal courthouse at aharris16@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net


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