Reuters logo
UPDATE 1-Abbott faces new US sales probe, Depakote in focus
November 6, 2009 / 8:23 PM / in 8 years

UPDATE 1-Abbott faces new US sales probe, Depakote in focus

* U.S. probing whether sales violated anti-kickback law

* Probe also examines possible false claims

* Involves Medicare, Medicaid payments to third parties

By Ransdell Pierson

NEW YORK, Nov 6 (Reuters) - Federal officials are investigating how Abbott Laboratories Inc (ABT.N) has marketed the epilepsy drug Depakote, the company said on Friday, the latest U.S. probe of its sales practices.

The suburban Chicago drugmaker said in a regulatory filing that the federal prosecutor for the Western District of Virginia is conducting the probe for the U.S. Justice Department.

Investigators are examining whether Abbott’s marketing of Depakote violated civil or criminal laws, including the Federal False Claims Act and an anti-kickback law related to reimbursement by the federal Medicare and Medicaid insurance programs to third parties, the filing said.

A spokeswoman for the Justice Department declined to comment on the matter.

“We are cooperating with the investigation,” said a spokeswoman for Abbott, who declined to comment further.

Depakote for years has been one of Abbott’s biggest-selling products, but its sales plunged 71 percent to $92 million in the third quarter due to competition from less-expensive generic forms of the drug.

The oral medicine is approved to treat various types of seizure disorders and manic phases of bipolar disorder.

The Justice Department in recent years has reached settlements with a number of large drugmakers accused of improperly selling drugs for unapproved uses and making improper payments to doctors prescribing their drugs.

In 2001, a joint venture between Abbott and Japanese drugamaker Takeda (4502.T) -- called TAP Pharmaceuticals Products -- paid a then-record $885 million and pleaded guilty to a criminal charge of conspiring with doctors to bill government insurers for free samples of prostate cancer drug Lupron.

Two years later, Abbott’s CG Nutritionals subsidiary pleaded guilty to obstructing an investigation of allegations that it defrauded Medicare and Medicaid. The unit was required to pay $200 million in criminal penalties and $400 million in civil fines.

The CG Nutritionals investigation involved the sale of enteral products -- devices used to pump special foods into the stomachs and digestive systems of patients who, because of disease or some other disorder, are not able to ingest food in a normal manner. (Reporting by Ransdell Pierson; additional reporting by James Vicini; editing by John Wallace)

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below