Abbott Laboratories: The Pharmacy’s Name on the Sales Pitch

In the Abbott Depakote nursing homes fraud case, Abbott Laboratories Inc. agreed to an $800 million civil settlement over allegations of off-label promotion and payments to health professionals and pharmacies to drive prescriptions. The nursing-home pitch concerned agitation and aggression in residents with dementia. A whistleblower’s complaint described how the manufacturer’s message reached prescribers inside a treatment guide bearing a pharmacy’s name.

The Department of Justice announced Abbott’s civil settlement on May 7, 2012. The allegations show how drug manufacturer payments in nursing homes could turn rebates, training and recommendations into prescriptions billed to government healthcare programs. One whistleblower had worked in Abbott’s long-term-care sales organization as an account specialist, field trainer and territory manager. His complaint described the sales operation from inside it.

Selling Depakote as a Way Around Drug Controls

Abbott allegedly promoted Depakote for dementia behavior by selling nursing homes a way around the administrative work attached to antipsychotic drugs. The government alleged Abbott told homes Depakote would let them avoid restrictions under the Omnibus Budget Reconciliation Act, commonly called OBRA.

The Justice Department’s account of the drug’s approved uses identifies epileptic seizures, bipolar mania and migraine prevention. Controlling behavioral disturbances in dementia patients was not an approved use. In 1999, Abbott discontinued a dementia trial because elderly participants receiving Depakote experienced increased adverse events, including excessive sleepiness, dehydration and anorexia.

The whistleblower’s second amended complaint alleged that Abbott created its long-term-care sales force in January 1998 to expand off-label sales for dementia-related agitation and aggression. It described centrally prepared messages and promotional aids, with representatives evaluated on their ability to persuade physicians to use the product.

Abbott allegedly turned protections against unnecessary medication into a reason to sell another drug to the same residents. The government said the pitch included false or misleading claims about safety, effectiveness, dosing and cost, with prescriptions billed to taxpayer-funded programs.

When the Medication Review Carried the Sales Pitch

The alleged pharmacy payments gave the promotion another route to the prescriber. According to the government, Abbott contracted to pay long-term-care pharmacies rebates based on increased Depakote use in the nursing homes they served. The government also described programs and materials Abbott created to encourage consultant pharmacists to recommend the drug for unapproved uses.

Consultant pharmacists reviewed residents’ medications monthly and could influence prescribing through those reviews. That made the pharmacy relationship valuable to a manufacturer trying to increase use. A recommendation arriving through a medication review carried a different kind of authority from a sales representative’s visit.

The complaint alleged that Abbott supplied treatment guides to consultants working for Omnicare and PharMerica, who used them to promote Depakote as a first-line treatment for dementia-associated anger, aggression and agitation. The cover helped carry the message:

The complaint also described an Abbott-funded educational CD distributed to Omnicare consultant pharmacists. Alongside presentations and the pocket guide, it allegedly contained draft letters asking treating physicians to change prescriptions to an off-label use of Depakote. The educational package came with the request to switch already written.

The California Research Bureau’s 1997 report Fraud and Abuse in the Health Care Market of California looks beyond the patient-doctor relationship to the contracts and financial arrangements behind it. In the complaint’s account, the pharmacy’s name appeared on the guide while the manufacturer funded the message and paid rebates for increased use. The recommendation reached the doctor; the financial arrangement sat behind it.

Separate Settlements for the Pharmacies

PharMerica and Omnicare later reached their own settlements over alleged Depakote kickbacks.

On October 7, 2015, the Justice Department announced PharMerica’s $9.25 million settlement. The allegations concerned rebates, educational grants and financial support intended to induce recommendations of Depakote to nursing-home residents. The consultant pharmacists’ monthly reviews supplied the opportunity to influence those recommendations.

On October 17, 2016, the department announced Omnicare’s $28.125 million settlement. Its allegations included grants, educational funding, rebates linked to use and management meetings. The government described the Re*View program as a vehicle for payments intended to increase Depakote use.

These separate cases followed the same commercial relationship from the recipient’s side.

What Abbott’s Civil Settlement Covered

Abbott’s civil settlement covered promotion allegations from 1998 through 2008 across several uses and government programs. It also covered other unapproved uses beyond dementia behavior.

The civil settlement announcement named Medicare, Medicaid, TRICARE and other federal health programs. Its reach extended well beyond prescriptions for nursing-home residents.

Abbott also entered a five-year corporate integrity agreement with the Department of Health and Human Services’ Office of Inspector General. It required Abbott to disclose payments to doctors on its website.

What Evidence Is Needed to Prove Fraud?

In a promotion and pharmacy-payment case, useful evidence connects the commercial incentive, the prescribing message and the resulting government claim. Our review of nursing home fraud evidence follows those connections across the manufacturer, pharmacy and facility.

The Abbott complaint gives a concrete example. It alleged that sales representatives entered their planning and sales-call notes on company laptops, then uploaded them to systems available to district managers and sales and marketing management. Those notes could connect the approved message to the physician approached and the managers tracking the call. The complaint also alleged that managers accompanied representatives and coached their off-label pitch.

For a pharmacy or nursing-home insider, rebate terms, utilization reports, medication-review recommendations, physician orders and the resident’s medication record can show different parts of that connection. We work with the person who understands those records to trace the recommendation into the prescription and claim.

The payment route matters too. Under Medicare’s skilled nursing facility billing framework, Medicare’s Part A payment to the home generally covers drugs, and the home pays outside suppliers under its contracts. Understanding who billed and who paid helps connect the commercial arrangement to the particular government payment.

How Much Is a Whistleblower Claim Worth?

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. Abbott’s civil settlement resolved four qui tam cases and provided a collective $84 million whistleblower reward from the federal share.

The later pharmacy settlements carried separate awards. The Justice Department announced $1 million from PharMerica’s federal share and $3 million from Omnicare’s federal share for a former Abbott employee. Manufacturer employees could see a payment arrangement whose effects reached beyond their own company’s sales ledger.

You Know Who Paid for the Recommendation

If you worked on the sales message, the pharmacy agreement or the medication review, talk with our whistleblower experts about the connection you saw. We build the pharmaceutical fraud case with you, bring in pharmaceutical fraud whistleblower lawyers who understand manufacturer payments and nursing-home prescribing, and stay beside you throughout the case.