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Pharmaceutical industry

Pharmaceutical Company Settles for $9.25 Million in Off-Label Marketing Scandal

Strategic Insights

— 1 min read

The Massachusetts Attorney General's office announced that PharMerica Corp. has agreed to pay $9.25 million to settle allegations of illegal off-label marketing of its drugs, resulting in the promotion of Depakote for uses not approved by the FDA. The multistate and federal settlement is expected to return $350,000 to Massachusetts' Medicaid program, MassHealth, and settles claims that PharMerica conspired with Abbott Laboratories through kickback arrangements to increase and promote off-label uses of Depakote. The settlement resulted from two whistleblower lawsuits filed under the federal False Claims Act and various state false claims statutes.

Key Takeaways:

  • PharMerica Corp. agreed to pay $9.25 million to settle allegations of illegal off-label marketing of its drugs.
  • The settlement is expected to return $350,000 to Massachusetts' Medicaid program, MassHealth.
  • PharMerica allegedly conspired with Abbott Laboratories through kickback arrangements to increase and promote off-label uses of Depakote.
  • The company is accused of promoting Depakote for uses not approved by the FDA, including treatment of patients with manic-like symptoms, Behavioral Disturbances in Dementia, and migraine headaches.
  • The settlement resulted from two whistleblower lawsuits filed under the federal False Claims Act and various state false claims statutes.
  • Assistant Attorney General George Zachos of the AG's Medicaid Fraud Division handled this matter on behalf of the AG's Office.
  • The joint state-federal investigation was conducted by a team appointed by the National Association of Medicaid Fraud Control Units, the United States Department of Justice, and the Office of Inspector General for the United States Department of Health and Human Services.

Statistics:

  • $9.25 million: the total amount PharMerica Corp. agreed to pay to settle allegations of illegal off-label marketing of its drugs.
  • $8.5 million: the amount PharMerica allegedly received from Abbott through kickback arrangements.
  • 2001-2008: the period during which PharMerica allegedly solicited and received illegal remuneration from Abbott.
  • $350,000: the amount expected to be returned to Massachusetts' Medicaid program, MassHealth.
  • 2: the number of whistleblower lawsuits filed under the federal False Claims Act and various state false claims statutes.

Sources:

  • Massachusetts Attorney General's office press release, issued Oct. 7.
  • PharMerica Corp. settlement agreement.
  • National Association of Medicaid Fraud Control Units.
  • United States Department of Justice.
  • Office of Inspector General for the United States Department of Health and Human Services.
  • United States District Court for the Western District of Virginia.

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