Tuesday, May 8, 2012

Two Major Victories!

May 8, 2012

Dear Friends and Fellow Virginians,

You might have read in today's news that I was in DC yesterday to announce the entry of court orders in two separate cases.  The second largest healthcare fraud case in history: $1.5 billion; and the largest consumer protection pharmaceutical settlement ever reached: $100 million.  Both of these cases were resolved against Abbott Laboratories for its fraudulent sales of the drug Depakote via the Medicaid programs in all 50 states, the federal Medicare program, and to private purchasers.
Virginia's Medicaid Fraud Control Unit (MFCU), which is a section of the Office of the Attorney General, was the lead investigative agency in the nationwide criminal and civil cases.  Often, in our federal-state law enforcement partnerships, it is the feds that carry most of the manpower load; however, in healthcare fraud cases, it is Virginia's MFCU that carries the lion's share of the work.
In this case a large pharmaceutical company, Abbott Laboratories, chose to cut corners to earn a buck – they illegally marketed the drug Depakote for uses not approved by the FDA - even when they had studies in hand that made it clear that Depakote did not work for the purposes they were pitching it to doctors (and had not been approved by the FDA).
Neither the defendant nor the whistleblowers were from Virginia, but the whistleblowers came to the Commonwealth because our Medicaid Fraud Control Unit is nationally renowned for successfully investigating major national cases such as these.
Our MFCU team worked for more than 4 years straight on this investigation, they traveled to 26 states, conducted countless interviews and scoured more than 1 million records looking for evidence.
We caught Abbott Laboratories breaking the law, we had the evidence to prove they did it and got them to admit it.
Under the terms of the settlement reached, they are paying $1.5 billion to the states and the federal government for the crimes they committed. This is the largest settlement ever achieved in a case involving only one drug, and it is the largest case ever where a state led the investigation.
$4.2 million will be returned to Virginia's Medicaid program.  $1.5 million is being returned to the MFCU unit to reimburse Virginia for the costs of conducting its investigation.  And some portion of the $198.5 million asset forfeiture will also be returned to the AG's office for Virginia's work in the case.  The final portion for Virginia will be determined by the federal DOJ.
If you'd like to read our full explanation of this case, click here.

A separate, second settlement was announced today between Abbott and 44 states and the District of Columbia for Abbott's violations of consumer protection laws by its fraudulent sales of Depakote.  The company will pay $100 million to these states. Virginia's share of this settlement is $2.2 million - some of which will be used to investigate future consumer protection cases.

An easy way to think of the difference between the two cases is that in the $1.5 billion criminal and civil case, the victim was public, i.e., government programs like Medicaid (and ultimately the taxpayers); whereas, in the $100 million consumer protection case, the victims were private, i.e., individual consumers and private companies.

If you're interested in more of the details surrounding the consumer protection case, click here.

Also, see here and here for some additional coverage.

I often remark that being Virginia's Attorney General is the best job I've ever had – working alongside our talented MFCU team and protecting consumers in Virginia and around the country has been a true honor and privilege.

So much goes on in the AG's office that I'd love to tell you about, and so many good folks work on your behalf in the AG's office, but I'd fill your inbox if I told you about it all!  The resolution of the cases today was good for Virginia and good for America, and a lot of teamwork went into achieving today's results, but it all started with the folks in Virginia's OAG.


Ken Cuccinelli, II
Attorney General of Virginia


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