Medical device and drugmaker Abbott Laboratories (NYSE: ABT) said it will pay $1.6 billion to settle federal and state claims regarding illegal off-label sales and marketing of its neurologic medication Depakote.
The Abbott Park, Illinois-based company will pay $800 million to resolve civil allegations split among federal and state governments, $700 million for a criminal penalty, and $100 million to states to resolve consumer protection matters. These amounts were previously reserved in anticipation of Monday's agreement, the company said in a statement.
We are pleased to resolve this matter and are confident we have the programs in place to satisfy the requirements of this settlement, Laura Schumacher, executive vice president and general counsel at Abbott, said in a statement. The company takes its responsibility to patients and health care providers seriously and has established robust compliance programs to ensure its marketing programs meet the needs of health care providers and legal requirements.
The settlement results from a four-year-old investigation into past sales activities that began in 1998 involving the anti-seizure and mood-stabilizing drug Depakote.
As part of the resolution, Abbott has agreed to plead guilty to one misdemeanor violation of the Food, Drug and Cosmetic Act for misbranding.
The company has announced plans to separate into two publicly traded companies by year's end.
The settlement is subject to approval by the Federal Court in the Western District of Virginia.
Shares of Abbott Laboratories (NYSE: ABT) closed up 0.16 percent, or 10 cents, to $62.51 in Monday's trading.