Monday, November 21, 2011

Back to the Standard Form Letter: Abbott Settles for $1.3B

In a recent post I was unable to employ my standard form to report legal settlements for corporate wrongdoing, due to the fact that many different drugs and several different allegations were all lumped together. Last month Bloomberg News reported--
--the following, which allows me to return to the standard format:

Drug Company: Abbott Laboratories
Drug: Valproic acid (Depakote)
Settled Federal charges of: Off label marketing (as well as state civil actions for inappropriate payments)
Fine paid: $1.3B
Fine as % of Annual Sales of Drug during Peak Year: 93%
Company Admits Guilt?: Can't tell from news report (the settlement was reported by "people familiar with the accords" and has not yet been officially announced)

What's notable about this settlement is both the fact that it topped $1B, though it's still only the third largest settlement; and the high percentage of annual sales the fine represents--we've seen from previous such reports that it's typical for the fine to be a mere 10% of annual sales.

Abbott is alleged to have heavily marketed valprioc acid, which is basically a drug to prevent seizures, for treating agitation and aggression in patients with dementia, autism, and various other disorders.