Abbott Settlement Includes Unprecedented Term of Probation, Mandatory Compliance Measures

10 May 2012
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Key takeaways:

  • On May 7, 2012, DOJ announced a settlement with Abbott Laboratories that includes a misdemeanor plea and a payment of $1.5 billion to resolve criminal and civil liability relating to allegations of off-label promotion. In a departure from past DOJ pharmaceutical company settlements, the Abbott plea agreement imposes court-supervised probation on the Company for a period of up to five years. The plea agreement also incorporates a number of compliance program requirements typically found in Corporate Integrity Agreements.
  • The Abbott plea agreement represents a new stage in DOJ's ongoing efforts to incentivize companies to implement effective compliance programs, heightening the potential adverse consequences if a company fails to do so.
  • The conditions of probation imposed on Abbott also include reporting requirements by the CEO and Board of Directors, underscoring the government's continued focus on what it views as the critical compliance oversight function and responsibility of senior executives and directors.