Abbott Labs agrees $1.6 billion settlement over Depakote marketing practices

Ending a four year investigation, US health care major Abbott Laboratories (NYSE: ABT) has reached a settlement with US federal and 49 state authorities, plus the District of Columbia, to resolve all outstanding issues regarding a previously disclosed investigation of past sales and marketing practices relating to its Depakote (divalproex), approved for the treatment of for the treatment of epilepsy, bipolar disorder and migraine prevention.

Once one of Abbott’s best-selling products, Depakote generated sales of $1.6 billion in 2007, but has since been exposed to generic competition. US sales of the drug were down to just $148 million in 2011.

Abbott will pay $800 million to resolve civil allegations split among federal and state governments, $700 million for a criminal penalty, and $100 million to states to resolve consumer protection matters. These amounts were previously reserved in anticipation of yesterday's agreement. The resolution is the second largest payment by a drug company, noted the US Department of Justice., The agreement trails the $2.3 billion settlement by Pfizer paid in 2009.