Abbott Labs, Again--More on Recent $1.6 Depakote Settlement

Okay, I admit that I'm confused. Last November I posted this about a $1.3B legal settlement paid by Abbott Laboratories over off-label marketing of its drug, valproic acid (Depakote):
http://brodyhooked.blogspot.com/2011/11/back-to-standard-form-letter-abbott.html

Now I learn from our friends at the Health Care Renewal blog that Bloomberg News just announced a $1.6B settlement from Abbott over the same drug for the same reason:
http://hcrenewal.blogspot.com/2012/05/abbott-pleads-guilty-settles-for-16.html
http://www.businessweek.com/news/2012-05-07/abbott-to-pay-1-dot-6-billion-to-settle-depakote-marketing-claims

So I have to assume that the article last November was a preliminary announcement and that this recent notice is the final announcement--otherwise Abbott would have paid a total of $2.9B over this one drug which would set a new record and would no doubt have been remarked on in the news media. The amount paid is of interest as previous reports of Pharma settlements often showed that the settlement sum, while in the hundreds of millions of dollars, was still only about 10% or 15% of the annual sales of the offending drug. In this case, $1.6B is the total annual sales figure for Depakote before it became generic. (But don't worry about Abbott, as the company proudly announced that they'd already set aside the funds needed to pay the settlement. Presumably, big drug companies find that sort of loose change under their sofa cushions.)

The settlement is also different from most in that Abbott was forced actually to admit wrongdoing, pleading guilty to a misdemeanor charge. As piddly as that may sound, in past settlements the company has usually been allowed to escape any admission of guilt.

Dr. Roy Poses over at Health Care Renewal focuses (as is his wont) on one aspect of this, which is the responsibility of the company and its CEO for this admitted wrongdoing. The settlement lets Abbott off the hook merely with being on probation for the next 5 years and promising not to do it again. Dr. Poses helpfully gives us Abbott's recent track record that presumably earned it this degree of lenience:

• Obstructing Justice - In 2003, an Abbott subsidiary settled civil allegations and pleaded guilty to obstructing a federal criminal investigation of its marketing practices, resulting in fines of $614 million ...
• Suppressing Reports of Drug Contamination - In 2009, the FDA charged that an Abbott subsidiary failed to report bacterial contamination of an optic product ....
• Blocking Generic Competition - In 2010, Abbott settled with the New York state Attorney General allegations that the company conspired to block generic competition for its lipid lowering drug TriCor ...
• Inflating Charges - In 2010, Abbott also settled with the US Justice Department for $421 million charges that it defrauded Medicare and Medicaid ....
• Paying Kickbacks to Doctors - In 2010, an Abbott subsidiary also settled with the US government charges it paid kickbacks to physicians to prescribe other cholesterol lowering drugs...
• Anti-Competitive Pricing Practices - In 2011, Abbott settled lawsuits alleging that its anti-competitive practices inflated prices of anti-viral drugs...

 Somehow I have the impression that if your typical petty criminal went before the judge with a guilty plea, and had this track record, that he'd be unlikely to get only a few years' probation.

 

 Dr. Poses is also very concerned about whether the CEO of a company that engages in this sort of illegal behavior ever suffers any penalties. I am very pleased to report that the Abbott CEO has indeed taken a hit, unlike most of his predecessors in similar circumstances. In 2010 his salary was $25,564,283. His 2011 salary was trimmed all the way down to $24,010,902.

 

Sort of gives new meaning to the term "making out like a bandit."