Millions More Demanded From Abbott

CHICAGO (CN) - Abbott Laboratories' $1.6 billion settlement for promoting Depakote for off-label uses was not enough to make insured workers whole, three unions claim in a federal class action.

Abbott paid $1.6 billion in state and federal settlements last year to resolve allegations that it promoted the anticonvulsant for off-label uses. That money included a $700 million criminal fine, $800 million in civil penalties, and $100 million to states for consumer protection.

Physicians are allowed to prescribe drugs for off-label uses, but drug companies cannot legally promote them for that.

Plaintiffs in the federal class action, filed Friday, are the Sidney Hillman Health Center of Rochester, the Teamsters Health Services and Insurance Plan Local 404, and the United Food and Commercial Workers Unions and Employers Midwest Health Benefits Fund.

The plaintiffs seek to represent "health benefit providers, individually and on behalf of classes of similarly situated entities (the 'Class' and three individual state 'Subclasses'" as defined below), to recoup not less than hundreds of millions of dollars they paid to defendant Abbott Laboratories ('Abbott,' or the 'Company') as a result of Abbott's scheme to increase sales of the drug Depakote by illegally marketing it for uses for which it was neither approved nor shown to be efficacious."

The lawsuit continues: "Since its initial approval by the Food and Drug Administration ('FDA') in 1983, Abbott has marketed and sold Depakote (divalproex sodium) in various forms. The FDA has approved the various forms of Depakote for three limited indications.

"Depakote is an anticonvulsant (anti-seizure drug): it is indicated as monotherapy and adjunctive therapy in the treatment of patients with complex partial seizures that occur either in isolation or in association with other types of seizures. Depakote was approved in 1995 for the treatment of acute mania or mixed episodes associated with bipolar disorder. Depakote has not been approved, however, for the long-term treatment of mania and controlled clinical trials have failed to demonstrate its effectiveness for such use. Depakote was approved in 1996 for the prophylaxis (prevention) of migraine headaches. It is not, however, indicated for the treatment of migraine headaches, nor is there evidence that Depakote is effective in the treatment of acute migraine headaches.

"Rather than market Depakote for its limited indications, Abbott, embarked on a scheme to market the drug for a variety of uses for which it had never sought or obtained FDA approval, including treatment of schizophrenia, control of agitation/aggression in elderly dementia patients, bipolar depression (in adults and children), developmental delay in children, and symptoms of narcotic drug withdrawal. Abbott had no reliable evidence of the drug's safety or efficacy for the treatment of those conditions. Moreover, Abbott knew or should have known that its misbranding of Depakote could jeopardize patients' safety.

"Abbott's promotion of Depakote for off-label purposes, alone and in combination with misrepresentations or intentional omissions of material information with regard to the drugs' safety and efficacy, violated, among other things, the Food, Drug and Cosmetics Act. 21 U.S.C. §§ 301, et seq.

"When the FDA approves a drug, it also approves labeling which lists the drug's 'indications,' that is, the conditions under which the product is to be used. Although physicians need not limit their prescriptions to the FDA approved indications, pharmaceutical manufacturers generally are prohibited from promoting their products for other than the indicated uses (sometimes referred to as 'off-label' uses).

"With the help of intermediary marketing firms and shadow entities funded by Abbott, as well as physicians paid to influence other doctors in exchange for lucrative kickbacks, Abbott aggressively marketed and sold Depakote for off-label uses.

"From 1998 through 2012 (the 'Class Period'), Abbott implemented these marketing schemes, dramatically increasing Depakote sales and paving the way for Abbott to profit at the expense of plaintiffs and other class members. By 2005, Abbott's sales of Depakote hit the billion dollar mark. In 2007, Depakote sales reached $1.5 billion.

"Abbott controlled and conducted one or more enterprises through which it

promoted Depakote's off-label use and made misrepresentations regarding the safety and efficacy of the drug for unapproved uses. In addition, Abbott paid, or with the assistance of intermediaries, caused to be paid, kickbacks to promote both on-label and off-label sales.

"On May 7, 2012, Abbott was held accountable for years of wrongful conduct when it pled guilty to a violation of the Food, Drug and Cosmetics Act and agreed to pay $1.6 billion to federal and state governments to address criminal sanctions and sanctions under relevant False Claims Acts. Unfortunately, these sanctions were insufficient to compensate for the harm caused to the Class and Subclasses.

Indeed, 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. But Abbott's illegal conduct also created significant liability to private payors of Depakote under Federal law (the Racketeer Influenced and Corrupt Organizations Act 18 U.S.C. § 1962), state deceptive trade practice acts, and the common law."

The classes include a nationwide class, an Illinois subclass, and a New York State subclass.

They seek hundreds of millions of dollars in damages, disgorgement, costs and treble damages for illegal marketing, RICO violations, FDA violations, unjust enrichment, intentional misrepresentation, concealment, fraud, wire fraud, deceptive trade.

Lead counsel is Adam Levitt with Grant & Eisenhofer.

Subscribe to Closing Arguments

Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.

Email *

Submit