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NC wins $15.8 million from Abbott Labs for fraud, AG Cooper announces

Release date: 10/8/2012

Attorney General’s expanded Medicaid fraud continues its crackdown

Raleigh:  North Carolina has recovered $15.8 million from Abbott Laboratories as part of a national health care fraud settlement involving the drug Depakote, Attorney General Roy Cooper announced today.
 
This is the latest recovery made by Cooper’s Medicaid Investigations Division, which has recouped nearly $500 million over the past decade and helped to convict hundreds of individuals on criminal charges. The division nearly doubled in size in recent years with the addition of new attorneys, investigators, criminal information analysts and support staff, allowing it to take on 46 percent more investigations than before.

“Making an unfair profit off of Medicaid wastes our tax dollars, drives up our health care costs, and keeps deserving patients from getting needed care,” Cooper said. “That’s why we’ve intensified our efforts to go after health care fraud.”
 
Of the $15.8 million recovered by North Carolina from Abbott, $917,553.61 will go to North Carolina public schools.  The remaining funds will go to support Medicaid efforts in the state.  The funds are part of a $1.5 billion national settlement involving other states and the federal government to resolve allegations that Abbott illegally marketed Depakote.
 
In a separate settlement handled by Cooper’s Consumer Protection Division, North Carolina won $3.7 million from Abbott Labs in May to resolve allegations that the company made misleading claims about Depakote and improperly marketed the drug.
 
Cooper and the other states contend that from January 1998 through December 31, 2008, Abbott promoted Depakote for uses that were not approved by the U.S. Food and Drug Administration (FDA) as safe and effective. This resulted in false claims to Medicaid and other taxpayer-funded health care programs. 
 
Depakote is approved by the FDA to treat seizures and mania associated with bipolar disorder and to prevent migraines.
 
The settlement also resolves allegations that Abbott made false and misleading statements about the safety, efficacy, dosing and cost-effectiveness of Depakote for some unapproved uses; improperly marketed the product in nursing homes; and paid illegal compensation to health care professionals to get them to promote and/or prescribe Depakote. 
 
Abbott will pay the states and the federal government a total of $800 million in civil damages and penalties to compensate Medicaid, Medicare, and other programs for harm suffered as a result of its conduct. In addition to the civil settlement, Abbott pleaded guilty to violating the Food, Drug, and Cosmetic Act and agreed to pay a criminal fine and forfeiture of $700 million. 
 
The case originated with four whistleblower cases filed under state and federal false claims statutes that were consolidated in the United States District Court for the Western District of Virginia.  North Carolina’s share of the settlement was reached by Cooper’s Medicaid Investigations Division (MID) and the North Carolina Division of Medical Assistance.
 
The MID investigates fraud and abuse of Medicaid benefits by hospitals, doctors, pharmaceutical companies, medical equipment companies, mental health and personal care providers, ambulance services and others. The division also investigates patient abuse and neglect in nursing homes and other facilities that receive Medicaid funds.  The unit includes attorneys, investigators and State Bureau of Investigation agents who work closely with United States Attorneys, District Attorneys, and other state and federal law enforcement agencies.



Media contact:  Noelle Talley (919) 716-6413