The $1.6 billion will settle claims by the US government that allege the firm illegally marketed Depakote for uses outside of its licence.
This includes marketing for: agitation and aggression in patients with dementia, autism, sexual compulsion, and other disorders.
The drug is currently licensed for the treatment of epilepsy, prevention of migraines, and treating acute manic episodes in bipolar patients. Promoting the drug off-label for any other indication is illegal in the US.
The acting associate attorney general Tony West said in a Justice Department statement: “Not only did Abbott engage in off-label promotion, but it targeted elderly dementia patients and downplayed the risks apparent from its own clinical studies.
“As this criminal and civil resolution demonstrates, those who put profits ahead of patients will pay a hefty price.”
This is the second highest payout from a pharma firm for the illegal marketing of a drug – behind Pfizer’s $2.3 billion for the illegal marketing of its Bextra painkiller.
The claims were originally brought by an ex-Abbott marketer, who said earlier this year that sales of Depakote “rocketed to over $1.4 billion per year” as a result of improper marketing.
The company will pay $800 million to resolve civil allegations split among federal and state governments, and $700 million for a criminal penalty, the Justice Department said in a statement.
An extra $100 million will also be paid to a number of states to resolve consumer protection matters, the Department added.
Abbott said it would also have to enter into a Corporate Integrity Agreement (CIA) with the office of inspector general of the US Department of Health and Human Services.
The CIA will govern Abbott’s compliance programme for a period of five years. The CIA will also transfer to Abbott’s new drug spin-off firm AbbVie upon its separation next year.
“We are pleased to resolve this matter and are confident we have the programmes in place to satisfy the requirements of this settlement,” said Laura Schumacher, executive vice president, general counsel.
“The company takes its responsibility to patients and healthcare providers seriously and has established robust compliance programmes to ensure its marketing programmes meet the needs of healthcare providers and legal requirements.”
The firm said it had already set aside these funds in expectation of today’s settlement.
The settlement results from a four-year-old investigation into Abbott sales practices that began in 1998.