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Deputy Attorney General James M. Cole Speaks at Press Conference Regarding Settlement with Abbott Laboratories
Washington, D.C. ~ Monday, May 7, 2012

Good afternoon. I’m pleased to join Acting Associate Attorney General Tony West, the United States Attorney for the Western District of Virginia, Tim Heaphy, the Attorney General for the State of Virginia, Ken Cuccinelli, HHS Inspector General Daniel Levinson, IRS Criminal Investigation Chief Richard Weber, and Assistant Special Agent in Charge of the Defense Criminal Investigative Service, Paul Sternal, to announce the latest developments in the administration’s continuing fight against health care fraud.

 

Every day, millions of Americans, young and old, take prescription medications with the assurance that their pills are safe and effective for the uses prescribed by their physicians. Laws enacted by Congress and the enforcement efforts of the Food and Drug Administration provide those important safeguards. The case we are announcing today is the latest in our efforts to bring the full weight of the Department of Justice down on those who, for the sake of profit, would undermine those safeguards.

 

This morning, Abbott Laboratories, a major health care company, pleaded guilty to a criminal charge of misbranding and agreed to pay a total of $1.5 billion to resolve criminal and civil liability for illegally marketing the prescription drug, Depakote, for uses that were never approved as safe and effective by the Food and Drug Administration.

 

For nearly a decade, Abbott marketed Depakote for a variety of unapproved uses, including the control of agitation and aggression in elderly dementia patients and the treatment of schizophrenia and other psychiatric conditions. Abbott encouraged nursing homes to circumvent federal regulations designed to protect elderly residents from unnecessary drugs. And Abbott undermined the independence of pharmacists who serviced nursing homes by creating financial incentives for them to increase the use of Depakote in the nursing homes they serviced.

 

This resolution is a major accomplishment. The $1.5 billion that Abbott will pay is the second largest amount ever paid by a pharmaceutical company.

 

But this resolution is significant not just for its size. It is significant for what it says about this Administration’s coordinated efforts to protect the integrity of programs like Medicare and Medicaid, upon which millions of Americans rely every day. In May 2009, Attorney General Eric Holder and Health and Human Services (HHS) Secretary Kathleen Sebelius announced the creation of the Health Care Fraud Prevention and Enforcement Action Team (known as HEAT) and renewed their commitment to fighting health care fraud as a Cabinet-level priority at both Departments. Since the creation of HEAT, the Department of Justice has recovered over $8.85 billion in settlements, judgments, fines, restitution and forfeiture in health care fraud matters pursued under the False Claims Act and the Food, Drug and Cosmetic Act. And our Medicare Strike Forces have brought criminal charges against more than 800 defendants seeking to defraud Medicare. Just last week, a nationwide takedown by our Strike Forces resulted in charges against 107 individuals, including doctors, nurses and other licensed medical professionals, for their alleged participation in Medicare fraud schemes.

 

As today’s announcement shows, we are committed to combating health care fraud in all its forms – from fly-by-night operations to some of the nation’s largest companies pursuing sophisticated schemes targeting government health care programs. Through HEAT, we will continue to marshal our forces in these efforts to protect American taxpayers and consumers against fraud, waste, and abuse.

 

Before I turn it over to the next speaker, I’d like to thank Tim Heaphy, the United States Attorney of the Western District of Virginia, and his office for their fine work on this impressive accomplishment, and for their long-standing dedication to making a lasting change in the health care industry. I know that Tim worked closely with the Medicaid Fraud Control Unit in his state, and I extend my thanks to that office and Virginia Attorney General Cuccinelli, as well. This case illustrates how a federal-state partnership can produce real results for the American people.

 

I would also like to thank the dedicated attorneys in the Justice Department’s Civil Division – both in the Fraud Section and the Consumer Protection Branch – for their hard work on this case and their antifraud efforts across all sectors. I am grateful, too, for the work of our partners at the Department of Health and Human Services, and its Office of Inspector General, the Food and Drug Administration, the Defense Criminal Investigative Service, and our other federal and state law enforcement partners, who have made invaluable contributions to this effort.

 

Now, it’s my pleasure to introduce the Acting Associate Attorney General, Tony West.

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