Technology: Abbott’s $1.6 billion global settlement illustrates government’s commitment to health care fraud enforcement

Abbott now has to put extensive internal controls in place to ensure this doesn’t happen again

Last month, the government obtained one of the largest settlements ever in a health care fraud matter, as Abbott Laboratories agreed to pay $1.6 billion to settle allegations that it unlawfully marketed its drug, Depakote. The global settlement, announced on May 7, included a criminal guilty plea and the settlement of numerous civil cases. Furthermore, the Office of Inspector General of the Department of Health and Human Services (OIG) and Abbott have entered into a five-year corporate integrity agreement (CIA), which will regulate Abbott’s prospective conduct.

The government’s investigation reportedly began in 2007, when a whistleblower contacted the Virginia attorney general’s office and shortly afterward filed a complaint under the qui tam provisions of the False Claims Act in the Western District of Virginia. Three additional qui tam lawsuits were subsequently filed by others against Abbott. The ensuing investigation reportedly involved witness interviews in 26 states and the production of more than one million documents.

Abbott settled civil False Claims Act allegations, asserted in the four qui tam actions, that Abbott’s unlawful marketing activities caused health care providers that administered Depakote to submit false claims to Medicaid and Medicare. Abbott agreed to pay approximately $561 million to the federal government and $239 million to several states. The four sets of whistleblowers will share $84.1 million from the federal settlement amount and will presumably also receive additional payments out of the state settlements.

Furthermore, Abbott agreed to pay $100 million to 45 states and the District of Columbia to settle a companion consumer fraud case.

Contributing Author

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Jesse Witten

Jesse Witten is a partner in the firm's Commercial Litigation Group and a member of the Life Sciences and White Collar Defense & Corporate Investigations Teams. He previously...

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