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    Press Release
  • Tennessee to Receive At Least $5 Million as Part of Major Healthcare Fraud Agreement

    May 8, 2012, #12-08

    Tennessee Attorney General Bob Cooper and Health Care Finance and Administration (HCFA) Deputy Commissioner Darin Gordon announced Tennessee will receive at least $5 million as part of a $1.5 billion settlement with a major pharmaceutical company. The announcement comes on the heels of a separate consumer protection agreement announced Monday with Abbott Laboratories of almost $2 million designated for Tennessee.

    The agreement resolves allegations by Tennessee, several other states and the federal government that Abbott Laboratories illegally marketed Depakote. The states contend that from January 1998 through Dec. 31, 2008, Abbott promoted the sale and use of Depakote for uses that were not approved by the Food and Drug Administration as safe and effective. This alleged conduct resulted in false claims to Medicaid and other federal healthcare programs.

    In addition, Abbott is alleged to have made false and misleading statements about the safety, efficacy, dosing and cost-effectiveness of Depakote for some unapproved uses; improperly marketed the product in nursing homes; and paid illegal remuneration to healthcare professionals and long term care pharmacy providers to induce them to promote and/or prescribe Depakote.

    The $1.5 billion settlement is the second largest recovery from a pharmaceutical company in a single civil and criminal global resolution. Abbott Laboratories will pay the states and the federal government a total of $800 million in civil damages and penalties to compensate Medicaid, Medicare, and various federal healthcare programs for harm suffered as a result of its conduct. In addition to the civil settlement, Abbott Laboratories has pleaded guilty to a violation of the Food, Drug, and Cosmetic Act (FDCA) and agreed to pay a criminal fine and forfeiture of $700 million. Further as a condition of the settlement, Abbott Laboratories will enter into a corporate integrity agreement with the U.S. Department of Health and Human Services, Office of the Inspector General. By law, the whistleblowers will receive a portion of the proceeds.

    "Our Office will continue work diligently with our state and federal partners to pursue any company that attempts to illegally divert funds designated for TennCare," Attorney General Cooper said.

    "The hard work from state and federal authorities to ensure taxpayer dollars are not misused is vital to the success of the TennCare program," Deputy Commissioner Gordon said. "The continued investigation and prosecution of Medicaid fraud is a significant component in keeping TennCare's trend well below national levels."

    This settlement is based on four whistleblower cases that were consolidated and are pending in the United States District Court for the Western District of Virginia in Abingdon, Virginia. The cases were filed under Federal and State false claims statutes. A state team appointed by the National Association of Medicaid Fraud Control Units participated in the investigation and conducted the settlement negotiations with Abbott on behalf of the participating states.