Abbott Laboratories: A Nursing-Home Sales Pitch Built on Less Paperwork

In the Abbott Depakote fraud settlement, Abbott Laboratories agreed in 2012 to pay $800 million to resolve civil allegations that off-label promotion and payments for prescriptions caused false claims to government health care programs. The nursing-home pitch offered a striking selling point: less paperwork. Abbott trained representatives to promote Depakote as a way to avoid administrative burdens attached to restrictions on unnecessary medication use.

The Justice Department’s settlement announcement traced decisions that different departments could see: what the sales force was trained to say, what the clinical studies showed, when the results reached the field, and what the pharmacy contracts rewarded.

What Is Considered Off-Label Promotion?

Off-label promotion means promoting a drug for a use outside its FDA approval. Depakote’s approved uses were epileptic seizures, bipolar mania and migraine prevention. Controlling behavioral disturbances in elderly dementia patients and treating schizophrenia were outside those approvals.

Abbott acknowledged that it maintained a specialized sales force from 1998 through 2006 to promote Depakote in nursing homes for agitation and aggression in elderly dementia patients. The Justice Department described that campaign as proceeding without credible scientific evidence that the drug was safe and effective for the use.

The company also acknowledged marketing Depakote with atypical antipsychotics for schizophrenia from 2001 through 2006, even after its trials failed to show that adding Depakote worked better than the antipsychotic alone.

The company chose the target patients, trained the sales force and supplied the message. Those are the business decisions at the center of this pharmaceutical fraud case.

The Nursing-Home Pitch Was Less Paperwork

Abbott’s representatives sold an administrative advantage alongside the drug. The pitch was that certain nursing-home restrictions applying to antipsychotics did not yet apply to Depakote, so using Depakote could spare the facility the burdens and costs of complying with them.

The restrictions were designed to prevent unnecessary medication use in nursing homes. According to the Justice Department, Abbott trained its sales force to present Depakote as advantageous over antipsychotics for precisely that reason.

The promised benefit was something the facility could avoid doing. The residents receiving the drug were elderly people with dementia.

The clinical evidence made the pitch more troubling. In 1999, Abbott discontinued a dementia trial because elderly participants receiving Depakote experienced increased adverse events, including somnolence, dehydration and anorexia. The nursing-home campaign continued beyond that trial. The administrative advantage remained a selling point even though the trial had stopped over harm to participants.

How Do Pharmaceutical Kickbacks Work?

Pharmaceutical kickbacks buy influence over which drug gets prescribed. In the Depakote civil case, the government alleged that Abbott paid health professionals and pharmacy providers to promote or prescribe the drug, causing false government claims. It alleged that Abbott’s long-term-care pharmacy contracts tied rebates to increased Depakote use in the nursing homes those pharmacies served.

A manufacturer rebate is a negotiated price concession that can reward volume or influence access to a drug. The government also alleged that Abbott created programs and materials to train the providers’ consultant pharmacists to recommend Depakote for the unapproved use. The pharmacy channel gave the campaign another way to reach the prescribing decision.

The government’s December 2014 complaint announcement against Omnicare explains why that channel mattered. Nursing homes had to retain consulting pharmacists to help ensure that residents’ prescriptions were appropriate. The government alleged that Omnicare’s pharmacists reviewed patient charts at least monthly and recommended drugs to physicians. It alleged that Omnicare used its influence over those physicians to obtain payments from Abbott.

According to that announcement, Abbott allegedly paid money described as grants and educational funding to induce Depakote recommendations. Omnicare’s Re*View program was presented as health management and education, while its internal description allegedly called for an extra prescription per patient. The complaint also alleged that Abbott funded Omnicare management meetings and offered its managers tickets to sporting events.

The alleged incentive ran directly against the purpose of the medication review. A service intended to protect residents from unnecessary drugs was allegedly being used to encourage more prescribing.

Omnicare later agreed to a separate $28.125 million civil settlement announced on October 17, 2016 over alleged receipt of kickbacks for Depakote recommendations, a fraction of Abbott’s civil payment. The pharmacy settlement allocated $3 million from the federal share to a whistleblower.

Failed Studies, an Unchanged Sales Message

Abbott funded two schizophrenia studies, and both failed to meet their main goals. The second failed to show a statistically significant treatment difference between antipsychotics combined with Depakote and antipsychotics alone.

Abbott then waited nearly two years to tell its sales force about the results and another two years to publish them. During that time, it continued promoting Depakote for schizophrenia, according to the Justice Department’s account of Abbott’s admissions.

The results reached the company long before they reached the people selling the drug. Someone in clinical research could know that the study had failed while the field team continued carrying the promotional message.

The 2012 paper Corporate Crime in the Pharmaceutical Industry Is Common, Serious and Repetitive, published in shorter form in BMJ, identified off-label marketing, misrepresented research results and hidden harm data as recurring practices in the cases it reviewed.

That is why the dates on internal study communications and training materials matter together. They can show what a company knew while its sales force was still delivering a different message.

The Civil Claims Followed the Prescriptions

The government’s civil allegations connected Abbott’s promotion and payments to false claims submitted to Medicare, Medicaid and other government healthcare programs. The alleged chain ran from the manufacturer’s conduct through prescribing and dispensing to the government’s bill.

Those allegations covered a broader period, from 1998 through 2008, and more uses than the nursing-home and schizophrenia campaigns. They included psychiatric conditions in children and adolescents. The government alleged that some promoted uses lacked the medical acceptance required for Medicaid coverage.

It also alleged false or misleading statements about safety, effectiveness, dosing and cost-effectiveness. Payments to health professionals and long-term-care pharmacy providers allegedly bought promotion and prescriptions and improperly influenced company-sponsored continuing medical education.

The payment connection gives the sales evidence its significance in a False Claims Act case. The training, the recommendation and the reimbursement concern different parts of the same transaction. An insider may see the manufacturer’s instructions or the pharmacy’s incentive before anyone looking at a government claim can explain why that prescription was generated.

What Changed Inside the Business

Abbott entered a five-year Corporate Integrity Agreement with the Department of Health and Human Services Office of Inspector General. It required the board to review the compliance program’s effectiveness, senior executives to certify compliance, standardized processes to assess and address risks, and public posting of information about payments to doctors.

What Proof Do You Need as a Whistleblower?

For a promotion case like Abbott’s, we assess how your evidence connects the company’s sales message and financial incentives to government-paid prescriptions. That takes an understanding of the business across departments.

A sales employee may know the instructions given to the field. A clinical or medical-affairs employee may know when the results became available and how they were communicated. A pharmacy or contracting employee may understand the payment formula and the recommendations it was intended to encourage.

We work with the insider to connect those views. The point is to explain how the message and the money moved through the business, and how they reached prescriptions paid by government programs.

How Much Money Do Pharmaceutical Whistleblowers Get for Exposing Fraud?

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

Abbott’s civil settlement allocated $84 million from its federal share to the whistleblowers who brought four qui tam cases. That award came out of the manufacturer’s civil payment, separate from the later pharmacy settlement.

You Know How the Drug Was Sold

If you know how a nursing-home sales pitch, a withheld study result or a pharmacy payment drove prescribing, talk with our whistleblower experts about what you saw. We build the case with you and bring in pharmaceutical whistleblower lawyers who understand promotion, pharmacy incentives and government reimbursement. We stay beside you through the process to build your strongest pharmaceutical whistleblower case.