Robbins Umeda LLP Announces an Investigation of Abbott Laboratories
Robbins Umeda LLP, a shareholder rights litigation firm, has commenced an investigation into possible breaches of fiduciary duty and other violations of the law by certain officers and directors at Abbott Laboratories (NYSE: ABT).
Robbins Umeda LLP’s investigation focuses on whether officials at Abbott breached their fiduciary duties to shareholders, maintained woefully inadequate controls, and wasted corporate assets to the detriment of the company and investors. The firm is investigating allegations that officials at the company allowed Abbott to knowingly engage in repeated and persistent violations of federal drug regulations through the routine “off-label” marketing of the company’s anti-seizure drug Depakote and Depakote ER. In particular, the firm is investigating claims that Abbott engaged in a “centrally-organized plan” to market “off-label” uses of the drug that trained sales representatives to misrepresent approved treatments and improperly incentivized healthcare providers to promote and prescribe Depakote for treatments not approved by the Food and Drug Administration.
These actions have drawn the scrutiny of the U.S. Department of Justice (the “DOJ”), with the DOJ commencing formal criminal and civil investigations into certain officers and directors at the company. On October 19, 2011, Abbott filed a Form 8-K with the U.S. Securities and Exchange Commission containing a press release disclosing that the company had reserved $1.5 billion “related to ongoing settlement discussions in the previously disclosed investigation by the U.S. Department of Justice…related to Depakote.” Abbott has tentatively agreed to pay at least $1.3 billion to settle claims by the DOJ and twenty-four states related to the “off-label” marketing of Depakote. This tentative settlement of $1.3 billion would be the third largest for illegal pharmaceutical marketing in U.S. history, and is likely to damage the company’s business reputation and intrinsic value for shareholders.
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