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Misconduct in the Pharmaceutical Sector - Abbott


My next installment on corruption in the pharmaceutical trade – Abbot Laboratories.
By Ronald Gibson.

Abbott Alkaloidal Company was founded in 1888 by Dr Wallace Calvin Abbott. This fledgling company innovated the use of the active molecules in medicinal plants, most notably alkaloids like morphine, strychnine, quinine, and codeine, into dosimetric granules, much like some naturopathic compounds of today. Abbott quickly spread its wings into an international company with many diverse products, by 1965 establishing interests in Canada, Pakistan, Japan, Europe and India, with Abbott at present being the largest healthcare products company in India.

The first official smudge in their record occurred in 1966 when, according to Lester Grinspoon and Peter Hedblom’s book, “The Speed Culture: Amphetamine Use and Abuse in America”, Abbott sold two million doses worth of methamphetamine in powder form to a Long Island criminal dealer. It seems Abbott behaved itself for the next 35 years in which many mergers and takeovers took place, ensuring that Abbott stayed in the running as a major pharmaceutical company.

Then comes 2001. TAP Pharmaceutical Products, a joint venture between Abbott Laboratories and Japan’s Takeda Chemical Industries, paid a settlement agreement of $875 Million over fraud charges relating to their prostate cancer drug, Lupron. It seems there were serious anomalies in charges and pricing with regards to Medicaid, and doctors were paid bribes to prescribe the product over other, cheaper products competing in the market¹.

December 2010, Abbot gets fined a cool $126,5 Million for their role in engaging in a scheme to report false and inflated prices for numerous pharmaceutical products knowing that federal healthcare programs relied on those reported prices to set payment rates.
B. Braun Medical Inc. and Roxane Laboratories Inc. n/k/a Boehringer Ingelheim Roxane Inc. and affiliated entities as well as Abbot paid a combined $421 Million as full settlement².

2011 - St. Jude Medical, with Abbott as parent company, coughed up $16 Million to resolve allegations that the company used post-market studies and a registry to pay kickbacks, inducing physicians to implant the company's pacemakers and defibrillators. This action was initiated under the False Claims Act by a whistle-blower.
These pesky pacemakers and defibrillators come to haunt St. Jude Medical, as they had to hand over nearly $3,9 Million, and an additional $3,65 Million in 2010 and 2012 for the very same transgressions³.

In Dec 2012 Abbott Laboratories plead guilty in order to resolve charges of misbranding its product Depakote, by marketing the drug for the control of agitation and aggression in elderly dementia patients, and to treat schizophrenia, while neither of these uses were FDA approved. This is termed as “off-label” use. Abbott confessed to having a dedicated sales force(of 300) marketing this drug to nursing homes during the period 1998 to 2006. This drug had no clinical or scientific evidence indicating that it was effective in treating agitation and aggression in elderly dementia patients. This drug was only approved for treatment of epileptic seizures, bipolar mania and the prevention of migraines.
This dedicated sales force covered all the bases. Their marketing base included health care providers and employees of nursing homes, they entered into contracts that provided long-term care pharmacy providers with payments of rebates based on increases in the use of Depakote in nursing homes serviced by the providers, and also created programs and materials to train the pharmacy providers’ consultant pharmacists about the off-label use of Depakote to encourage them to recommend the drug for this unapproved use.
The total fine for this remarkable example of lack of ethics – a whopping $1’500’000’000⁴.

2013 – Again violating the False Claims Act by paying kickbacks to induce doctors to implant the company’s carotid, biliary and peripheral vascular products, Abbott is given a paltry $5.475 Million rap over the knuckles, seeing that their profits for the year was $2,6 Billion⁵.

It seems that not even infant milk formula is safe from being exploited. Abbott is fined $12 Million in China during 2013 for their role in price fixing and anti-competitive practices relating to milk formula⁶.

2014 The US Department of Justice fines Abbott $5.475 Million in another Health Fraud case – this time for kickbacks paid to doctors to implant the company’s carotid, biliary and peripheral vascular products. But they went a step further, allegedly paying prominent physicians for teaching assignments, speaking engagements and conferences with the expectation that these physicians would arrange for the hospitals with which they were affiliated to purchase Abbott’s carotid, biliary and peripheral vascular products⁷.

More recently the role of Abbott in the Purdue Pharma/OxyContin judgement for Inappropriate Marketing of 2004 was exposed when a West Virginia judge ruled that the sealed documents should be made public in 2016. It emerged that as Abbott had a huge presence in the market where Purdue wanted to sell OxyContin, and agreement was reached between the two companies that Abbott would assist in building the OxyContin brand. Part of the agreement was that Abbott would receive indemnity from any legal costs that might arise from the selling of the drug. Due to this partnership and unethical marketing practices as described in the court documents, the turnover of OxyContin increased from $49 Million in 1996, to $1,6 Billion in 2002. Purdue was fined a paltry $10 Million and Abbot got away without a scratch⁸. What is also notable is that some analysts in the profession attribute this period of growth in the sale of OxyContin as the birth of the present opioid epidemic in the USA, with the trafficking of this drug now starting to affect Canada, and regular FDA action for unethical prescription habits by medical professionals, with Florida doctors, pain clinics and pharmacies forming the hub.

1. http://www.marketwatch.com/story/abbott-takeda-venture-in-to-875-mln-lupron-settlement. http://www.nytimes.com/2001/10/04/business/2-drug-makers-to-pay-875-million-to-settle-fraud-case.html

2. https://www.justice.gov/opa/pr/pharmaceutical-manufacturers-pay-4212-million-settle-false-claims-act-cases

3. https://www.justice.gov/opa/pr/minnesota-based-st-jude-medical-pays-us-16-million-settle-claims-company-paid-kickbacks. https://www.justice.gov/opa/pr/heart-device-manufacturer-minnesota-and-hospitals-ohio-kentucky-pay-nearly-4-million-resolve. https://www.justice.gov/opa/pr/minnesota-based-st-jude-medical-pays-us-365-million-settle-claims-it-overcharged-implantable

4. https://www.justice.gov/opa/pr/abbott-labs-pay-15-billion-resolve-criminal-civil-investigations-label-promotion-depakote

5. https://www.justice.gov/opa/pr/abbott-laboratories-pays-us-5475-million-settle-claims-company-paid-kickbacks-physicians

6. http://www.reuters.com/article/us-meadjohnson-china-idUSBRE97512S20130807

7. https://www.justice.gov/opa/pr/abbott-laboratories-pays-us-5475-million-settle-claims-company-paid-kickbacks-physicians

8. https://www.statnews.com/2016/09/22/abbott-oxycontin-crusade/

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