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Attorney General Marty Jackley

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Abbott Laboratories to Pay Additional $1.5 Billion Healthcare Fraud Settlement

FOR IMMEDIATE RELEASE :    Monday, May 07, 2012   
CONTACT: Sara Rabern,  (605) 773-3215 

Abbott Laboratories to Pay Additional $1.5 Billion Healthcare Fraud Settlement

PIERRE, S.D.  –   Attorney General Marty Jackley announced today that in addition to the Abbott Consumer Settlement, South Dakota has joined with other states and the federal government and reached an agreement with Abbott Laboratories to settle civil and criminal allegations that Abbott Laboratories illegally marketed Depakote.  The states contend that from January 1998 through December 31, 2008, Abbott promoted the sale and use of Depakote for uses that were not approved by the Food and Drug Administration as safe and effective.  This alleged conduct resulted in false claims to Medicaid and other federal healthcare programs.  Further, the covered conduct from the settlement provides that Abbott Laboratories made false and misleading statements about the safety, efficacy, dosing and cost-effectiveness of Depakote for some unapproved uses; improperly marketed the product in nursing homes; and paid illegal remuneration to health care professions and long term care pharmacy providers to induce them to promote and/or prescribe Depakote. 
The $1.5 billion settlement is the second largest recovery from a pharmaceutical company in a single civil and criminal global resolution.  Abbott Laboratories will pay the states and the federal government a total of $800 million in civil damages and penalties to compensate Medicaid, Medicare, and various federal healthcare programs for harm suffered as a result of its conduct.  In addition to the civil settlement, Abbott Laboratories pled guilty this morning to a violation of the Food, Drug, and Cosmetic Act (FDCA) and agreed to pay a criminal fine and forfeiture of $700 million.  Further as a condition of the settlement, Abbott Laboratories will enter into a Corporate Integrity Agreement with the United States Department of Health and Human Services, Office of the Inspector General.

South Dakota’s share in the recovery will be $1,300,711.44 and of that share, $443,051 will go back to the State’s general fund and $857,660 is the federal share.

“Today’s settlement puts a stop to an improper pharmaceutical company marketing practice that needlessly wasted taxpayer dollars,” said Jackley. “By working with our federal and state law enforcement partners, we can ensure that taxpayer dollars are put to better use funding essential Medicaid services.”

The South Dakota Medicaid Fraud Control Unit and the South Dakota Department of Social Services assisted in recovering the settlement money.