UNITED STATES DISTRICT COURT 

NORTHERN DISTRICT OF ILLINOIS 

EASTERN DIVISION 

PIPEFITTERS LOCAL UNION NO. 120 

PENSION FUND, Derivatively and on Behalf 

of Nominal Defendant ABBOTT 

LABORATORIES, INC., 

 Plaintiff, 

 vs. 

MILES D. WHITE, H. LAURANCE 

FULLER, ROXANNE AUSTIN, W. JAMES 

FARRELL, SAMUEL C. SCOTT, GLENN 

TILTON, WILLIAM OSBORN, ROBERT 

ALPERN, WILLIAM DALEY, W. ANN 

REYNOLDS, DAVID OWEN, ROY 

ROBERTS, WILLIAM SMITHBURG, 

BOONE POWELL, JR., 

 Defendants, 

 and 

ABBOTT LABORATORIES, INC., 

 Nominal Defendant. 

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Civil Action No. _____________ 

JURY TRIAL DEMANDED 

VERIFIED SHAREHOLDER DERIVATIVE COMPLAINT

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TABLE OF CONTENTS

Page 

INTRODUCTION ...........................................................................................................................1 

JURISDICTION AND VENUE ......................................................................................................8 

THE PARTIES.................................................................................................................................8 

A. Plaintiff ....................................................................................................................8 

B. Nominal Corporate Defendants ...............................................................................9 

C. The Director Defendants ..........................................................................................9 

D. The Former Director Defendants ...........................................................................11 

FACTUAL BACKGROUND ........................................................................................................12 

A. Abbott’s Drug Business Is Highly Regulated ........................................................12 

1. The FDA Approves Drugs for Specific Uses Only Upon a Showing 

That the Drug is Safe and Effective for That Use ......................................12 

2. The FDA Prohibits Abbott and Other Drug Companies From 

Marketing Drugs for Off-Label Uses .........................................................13 

3. Off-Label Marketing Violates the False Claims Act and Numerous 

State False Claims Acts .............................................................................14 

4. The Anti-Kickback Act Also Regulates Abbott’s Marketing ....................15 

B. Abbott Flouted the Laws Governing It By Engaging in a Massive OffLabel Marketing Scheme Between 1998 and 2009 ...............................................16 

1. Depakote’s Rise and Fall as a Blockbluster Drug and “Cash-cow” 

for Abbott ...................................................................................................16 

2. Abbott’s Illegal, Off-Label Depakote Marketing Scheme .........................18 

i. Between 1998 and 2009, Abbott Maintained the LTC Sales 

Force to Laud Off-Label Uses of Depakote and to 

Manipulate Healthcare Professionals .............................................22 

ii. Abbott’s Improper Use of Misleading Clinical Studies to 

Support Off- Label Uses for Depakote Products ...........................24 

iii. Abbott Improperly Promoted Off-Label Uses of Depakote 

With Journal Supplements .............................................................27 

iv. Abbott Bribed “Key Opinion Leaders” to Increase Sales of 

Depakote for Off-Label Uses .........................................................28 

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v. Abbott Improperly Used Speaker Presentations to Promote 

Off-Label Uses of Depakote ........................................................28 

vi. Abbott Improperly Used CMEs to Further Promote 

Depakote Off-Label Uses ..............................................................29 

vii. Abbott Falsified Medical Education Requests for Off-Label 

Information About Depakote Products to Increase Sales of 

Depakote for Such Off-Label Uses ................................................30 

viii. Abbott Improperly Generated Scientific “Evidence” to 

Support Off- Label Uses of Depakote ...........................................31 

ix. Abbott Uses In-Services to Promote Off-Label Uses of 

Depakote ........................................................................................32 

x. Abbott’s Improper Detailing of Depakote Products to 

Healthcare Professionals and Improper Targeting of Their 

Pharmacy and Therapeutics Committees .......................................32 

xi. Abbott Funded the Development and Use of Clinical 

Practice Guidelines to Tout Off-Label Uses of Depakote 

and to Mislead Healthcare Professionals .......................................34 

xii. Abbott’s Improperly Paid Physicians of Preceptorships 

Monies to Induce Them into Prescribing Depakote 

Products..........................................................................................36 

xiii. Abbott Improperly Used OBRA-87 Limits on 

“Unnecessary Drugs” to Promote Off-Label Uses of 

Depakote in Long-Term Care Facilities ........................................36 

C. Defendants Had a Duty to Know How Depakote, a Key Product, Was 

Being Marketed, Did Know How It Was Marketed and Consciously 

Allowed Unlawful Off-Label Practices to Continue .............................................37 

1. Duties of the Company Directors ..............................................................37 

2. At All Times, Defendants Knew That Off-Label Marketing Was 

Illegal and a Major Risk for the Company .................................................41 

3. Each Defendant Was Also Put On Notice of the Prohibition on 

Off-Label Marketing By a Long History of Government 

Investigations and Warnings Concerning Abbott’s Marketing 

Practices .....................................................................................................43 

4. 

 ..............................................................................53 

D. The Government Investigation ..............................................................................60 

DEMAND IS FUTILE ...................................................................................................................62 

COUNT I .......................................................................................................................................65 

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PRAYER FOR RELIEF ................................................................................................................66 

JURY DEMAND ...........................................................................................................................67 

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Pipefitters Local Union No. 120 Pension Fund (“Plaintiff” or “Pipefitters 120”), by and 

through its undersigned counsel, hereby makes the following allegations in its Verified Shareholder 

Derivative Complaint (the “Complaint”) on behalf of Abbott Laboratories (“Abbott”), as the nominal 

defendant, against the Chairman and CEO of Abbott, Miles D. White, seven other current directors 

of Abbott (with White, the “Director Defendants”), and six former directors of Abbott (collectively, 

the “Individual Defendants”). The allegations herein are based upon Plaintiff’s personal knowledge 

as to its own acts and on information and belief, including the investigation of counsel and review of 

publicly available information, including SEC filings, analyst reports, medical journal articles and 

confidential business records obtained from Abbott pursuant to 805 Ill. Comp. Stat. 5/7.75, as to all 

other matters. 

INTRODUCTION

1. This shareholder derivative litigation seeks to hold Defendants liable for consciously 

allowing Abbott to unlawfully and systematically market Depakote, Depakote Sprinkles, Depacon, 

Depakene, Depakote ER and Depakote DR (“Depakote”) to physicians and patients for off-label 

uses, a practice each Defendant knew was unlawful, thereby causing the Company to incur at least 

$1.3 to $1.5 billion in fees necessary to settle the civil and criminal liability against it and 

endangering the Company’s ability to participate in Medicare, Medicaid and other state health 

programs that are critical to the Company’s continued viability.

2. It is an open secret that pharmaceutical companies engage in widespread marketing 

of their drugs to physicians and patients for uses that have not been approved by the U.S. Food and 

Drug Administration (“FDA”), so-called “off-label” uses, to generate billions of dollars in illicit 

revenues. About 15% of all drug sales in the U.S. are for off-label purposes, amounting to 

approximately 10 million prescriptions a year. See David Evans, “Pfizer Broke the Law by 

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Promoting Drugs for Unapproved Uses,” Bloomberg News, Nov. 9, 2009. Pharmaceutical 

companies such as Abbott spend vast amounts of money to develop blockbuster name brand drugs 

that are protected from competition by patents for approximately 7 to 12 years and are therefore able 

to achieve premium pricing during that period. In order to maximize their return on investment, the 

companies want physicians to prescribe their drugs as widely as possible. By the unlawful practice 

of off-label marketing, also called misbranding of drugs, pharmaceutical companies can increase the 

sales of their product (measured by number of prescriptions or “scripts”) to an expanded pool of 

patients who suffer from medical conditions for which the drug is not FDA-approved. 

3. While the law and the enforcement practices of the U.S. Food and Drug 

Administration (“FDA”) categorically ban the misbranding of drugs by pharmaceutical companies, 

physicians are not under any similar prohibition. Physicians are permitted to prescribe any FDAapproved drug for any use (or medical “indication”) including off-label use. The reason for this 

dichotomy is as follows: the FDA approves drugs only after careful study of clinical trial results and 

a balancing of the efficacy of the drug versus its risks. To ensure the safe use of a drug (meaning a 

cost benefit analysis results in its efficacy outweighing its risk) the FDA requires that pharmaceutical 

companies strictly market the drug only for the use or uses for which it was approved. Since neither 

the FDA nor pharmaceutical companies practice medicine, however, and doctors are the best arbiters 

of how best to treat their patients, physicians are permitted to dispense any approved drug for any 

medical indication. This regulatory structure allows for a potential loophole where drug companies 

can evade the consumer protections imposed by U.S. drug safety laws by disseminating misleading 

information to doctors in order to induce them to prescribe drugs for off-label uses.

4. Unfortunately, the use of drugs off-label is often worthless or even dangerous for 

patients. Seventy-three percent of off-label drug use has little or no scientific merit, that is, no 

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benefit to the patients. See Tan, S.Y. “Off-label use of medications,” Wall Street Journal, October 

15, 2011. Moreover, off-label drug use can pose significant health hazards to patients. For example, 

Depakote has been linked to some life threatening side effects such as pancreatitis, liver damage and 

suicidal thoughts in patients and to some serious, though not life threatening, side effects such as 

cognitive impairments to babies born to mothers taking Depakote during pregnancy. While these 

risks may be worth taking to suppress disabling epileptic seizures or manic episodes of bipolar 

affective disorder (for which Depakote is FDA-approved), they are not justified when doctors are 

misled into prescribing Depakote based on the illusory benefits promoted by Abbott’s marketing 

department. 

5. Off-label drug use drives up the cost of health care for patients and taxpayers, who 

often pay for the off-label prescriptions induced by Abbott and other drug companies through 

government healthcare programs such as Medicare and Medicaid. The ten million off-label 

prescriptions made every year translates into billions of dollars in additional costs. According to 

Professor Jeffrey Avorn, a professor at Harvard Medical School, off-label promotion of drugs 

imposes an “unbearable cost to a system that’s going broke . . . we can’t even afford to pay for 

effective, safe therapies.”1 Off-label marketing also constitutes Medicare fraud and violates the 

False Claims Act (“FCA”) because it causes the government to pay for drugs for uses not approved 

by the FDA. 

6. Abbott, under the stewardship of Individual Defendants, has been one of the most 

egregious law-breakers in the pharmaceutical industry. As shown by the chart below, Abbott has 

been embroiled in Medicare fraud scandals more times than its competitors and, counting the $1.5 

 

1 See David Evans, “Pfizer Broke the Law by Promoting Drugs for Unapproved Uses,” Bloomberg 

News, Nov. 9, 2009. 

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billion set aside in 2011 for settling the Company’s liability for off-label marketing of Depakote, 

Abbott’s total amount of fines is $3.1 billion, significantly exceeding the fines paid by any of its 

competitors.2 

7. This pervasive, persistent, illegal behavior is clearly not the result of management 

repeatedly making innocent mistakes. Abbott’s top management, including its CEO and directors, 

have chosen to risk Abbott’s future by allowing the Company to operate in a manner that breaks the 

law, including by engaging in off-label marketing of one of its most important drugs, and in 

 

2

 A review of the most recent SEC Form 10-Ks for these companies did not reveal any additional 

relevant fines altering the fact that Abbott has paid the most fraud fines. 

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Medicare fraud, in order to chase short term profits. By engaging in off-label marketing, Abbott 

risks devastating consequences, including a felony conviction for the Company that would render its 

drugs ineligible for reimbursement by state health programs and federal Medicare. Because of the 

pervasive role of government payments in the medical industry, disbarment would likely cause 

Abbott’s demise as a going concern. 

8. To date, the primary tool used by the U.S. government to enforce the prohibition 

against misbranding their products by the pharmaceutical industry has been Consent Decrees known 

as Corporate Incentive Agreements (“CIAs”) and imposition of fines that, while large, recoup only a 

small fraction of the illicit gains created by off-label marketing. For example, the $2.3 billion fine 

paid by Pfizer in 2009 for off-label marketing of Bextra and three other drugs represented only 14% 

of its $16.8 billion in revenue from selling those medicines between 2001 and 2008. The penalties 

paid by Eli Lilly in connection with the off-label marketing of Zyprexa represented only 4% of the 

$36 billion that the drug generated between 2000 and 2008. 

9. Essentially, Defendants are gambling that they and Abbott can “get away with” 

indefinitely inflating Abbott’s revenues through illegal off-label marketing and paying back a small 

percentage of their ill-gotten gains if they get caught. As Lon Schneider, a professor at the 

University of Southern California’s Keck School of Medicine, has described, “There’s an unwritten 

business plan. . . They’re drivers that knowingly speed. If stopped, they pay the fine and then they 

do it again.”3

10. Defendants were “knowingly speeding” with respect to the off-label marketing of 

Depakote. The recently unsealed whistleblower complaints of Thomas Spetter, Meredith McCoyd 

 

3 See “Pfizer Broke the Law by Promoting Drugs for Unapproved Uses,” Nov. 9, 2009, Bloomberg 

News

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and Tamara Dietzler detail at length how, between 1998 and 2009, “[i]n order to address the 

stagnation of profits. . . Abbott embarked upon several centrally-organized, illegal marketing 

schemes to convince physicians to prescribe Depakote for a number of diseases and disorders for 

which the drug had (and continues to have) no FDA-approved indication.” These unlawful 

campaigns, which the Defendants, at a minimum, consciously disregarded and did nothing to stop, 

were particularly egregious in that vulnerable populations such as the elderly, institutionalized 

individuals and children were targeted to drive up prescriptions of Depakote even though the 

efficacy of the drug for the promoted uses (such as agitation in the elderly and attention deficit 

hyperactivity disorder in children) was either not known or known to be worthless. 

11. Depakote is a valproic acid and is in a class of medications known as anticonvulsants. 

While the exact pharmacological action is unknown, Depakote has an ability to increase brain levels 

of the inhibitory neurotransmitter gamma amino butyric acid (GABA). It is a powerful drug that is 

known to be effective for some patients with certain maladies, but causes serious side effects in 

others. The FDA requires that it carry a “black box” warning. A black box warning is the strongest 

form of warning of adverse side effects issued by the FDA; it is a step taken just short of removing 

the drug from the market. Depakote was approved by the FDA in 1983 for the treatment of simple 

and complex seizures associated with epilepsy in adults. Its approved use was expanded by the FDA 

over the ensuing decades to include treatment of acute mania or mixed episodes suffered by adult 

patients with bipolar affective disorder, certain types of epileptic seizures in children over the age of 

ten, and for the prevention of migraine headaches. 

12. Depakote was one of Abbott’s most important drugs. For example, between 2005 and 

2008, years for which Abbott released figures for its U.S. Depakote sales, Depakote accounted for 

between 8% and 11% of its total U.S. sales. 

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13.

4

 Yet, in violation of their fiduciary duties of good faith and loyalty to Abbott, 

Individual Defendants allowed the Abbott employees 

 to blithely break the law by making misleading representations to 

physicians, pharmacies, and nursing homes to generate prescriptions for the drug. 

14. The U.S. government is now prosecuting Abbott for 10+ years of willful off-label 

marketing and the resultant Medicare fraud and False Claims Act violations. It is not presently clear 

what the ultimate legal ramifications will be for Abbott or how many of the Defendants will be 

individually prosecuted. 

 

4

 

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 Further, each Defendant faces a substantial likelihood of 

liability under the False Claims Act and for breach of fiduciary duty (See infra ¶¶167-70). 

Moreover, Abbott has reserved $1.5 billion to cover its potential liability, and has reportedly agreed 

to settle the claims of the U.S. government and twenty-four states in exchange for $800 million in 

civil penalties and $500 million in criminal penalties, large penalties that underscore the serious 

nature of the wrongdoing. This action seeks to recoup some of these losses. In addition, Abbott has 

a moral and legal obligation to its shareholders and customers to change the way it markets its drugs. 

This action seeks to force the Company to enact reforms that will cause it to finally comply with 

these obligations. 

JURISDICTION AND VENUE

15. This Court has jurisdiction pursuant to 28 U.S.C. § 1332(a)(1) in that Plaintiff and 

Defendants are citizens of different states and the matter in controversy exceeds the jurisdictional 

amount of $75,000, exclusive of interest and costs. This action is not a collusive action designed to 

confer jurisdiction on a court of the United States that it would not otherwise have. 

16. Venue is proper in this District pursuant to 28 U.S.C. § 1391(a)(1) because nominal 

defendant Abbott is headquartered in this District. Moreover, a substantial portion of the 

occurrences complained of herein occurred in this District. In addition, one or more of the 

Defendants either reside in, or maintain offices in, this District. 

THE PARTIES

A. Plaintiff 

17. Plaintiff Pipefitters Local Union No. 120 Pension Fund is an Ohio-based pension 

fund and current shareholder of Abbott. As of the date of this Complaint, Pipefitters 120 held 5,900 

shares of Abbott and has held shares continuously since January 4, 2007. On December 12, 2011, 

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Plaintiff exercised its right as a shareholder to inspect Abbott’s books and records under 805 Ill. 

Comp. Stat. 5/7.75 by sending a letter to Defendant Miles D. White demanding to inspect certain 

Abbott books and records concerning off-label marketing of Depakote. On January 11, 2012, 

counsel for Plaintiff received a letter from counsel for Abbott stating that Abbott would agree to 

produce a subset of the requested documents if Plaintiff agreed to enter into a confidentiality 

agreement that required Plaintiff to file under seal any documents reflecting confidential business 

records. On February 24, 2012, Abbott produced 3,310 pages of documents, many of which were 

redacted. 

B. Nominal Corporate Defendants 

18. Nominal defendant Abbott is an Illinois corporation with its principal place of 

business in Abbott Park, Illinois. According to its public filings, Abbott’s principal business is the 

discovery, development, manufacture and sale of health care products. Like many pharmaceutical 

companies, Abbott derives large portions of its revenues from a few blockbluster drugs that it has 

developed and for which Abbott holds the patent. Patent protection shields Abbott’s name-brand 

drugs from generic competition and allows Abbott to sell its drugs at premium prices while the 

patent lasts. Depakote was one of Abbott’s most important drugs, generating billions of dollars in 

revenue and accounting for between 8% and 11% of Abbott’s U.S. sales in the years 2005-2008. 

Depakote remained a significant source of revenue through the expiration of the patent on Depakote 

ER in early 2009, and the off-label marketing continued at least to that point. 

C. The Director Defendants 

19. Defendant Miles D. White (“White”) is Abbott’s Chief Executive Officer (“CEO”) 

and Chairman of its Board. White has served as a director of the Company since 1998, and became 

its CEO in 1999. Upon information and belief, White is a citizen of Illinois. This is not the first time 

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that White has faced serious charges that he has breached his fiduciary duty to Abbott shareholders 

by failing to act in good faith to ensure the Company’s compliance with the law. In In re Abbott 

Laboratories Derivative Shareholders Litigation, 325 F.3d 795 (7th Cir. 2003), the Seventh Circuit 

found that the plaintiffs in that action had adequately pled that White had not acted in good faith to 

correct violations of FDA regulations governing the manufacture of certain Abbott products. 

20. Defendant H. Laurance Fuller (“Fuller”) has served as a director of the Company 

since 1988. Fuller has been a member of the Board’s Nominations and Governance Committee 

since 2003, and currently serves as its Chairman. Upon information and belief, Fuller is a citizen of 

Illinois. The Seventh Circuit in Abbott found that plaintiffs had adequately alleged that Fuller had 

failed to act in good faith to correct violations of FDA regulations governing the manufacture of 

certain Abbott products. 

21. Defendant Roxanne S. Austin (“Austin”) has served as a director of the Company 

since 2000. Austin has been a member of the Board’s Audit Committee since 2007, currently 

serving as its Chairman, and has continuously served as a member of the Board’s Public Policy 

Committee since 2003. Upon information and belief, Austin is a citizen of California. 

22. Defendant W. James Farrell (“Farrell”) has served as a director of the Company since 

2006. Farrell has been a member of the Board’s Nominations and Governance Committee since 

2006. Upon information and belief, Farrell is a citizen of Illinois. 

23. Defendant Samuel C. Scott, III (“Scott”) has served as a director of the Company 

since 2007. Scott has been a member of the Board’s Audit Committee since 2007. Upon 

information and belief, Scott is a citizen of Illinois. 

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24. Defendant Glenn F. Tilton (“Tilton”) has served as a director of the Company since 

2007. Tilton has been a member of the Board’s Audit Committee since 2007. Upon information and 

belief, Tilton is a citizen of Illinois. 

25. Defendant William A. Osborn (“Osborn”) has served as a director of the Company 

since 2008. Osborn has been a member of the Board’s Nominations and Governance Committee 

since 2010. Upon information and belief, Osborn is a citizen of Illinois. 

26. Defendant Robert J. Alpern, M.D. (“Alpern”) has served as a director of the Company 

since 2008. Alpern has been a member of the Board’s Public Policy Committee since 2009. Upon 

information and belief, Alpern is a citizen of Connecticut. 

27. Defendants White, Fuller, Austin, Farrell, Scott, Tilton, Osborn, and Alpern are 

collectively referred to as the “Director Defendants.” The Director Defendants comprise a majority 

of Abbott’s twelve-person Board of Directors at the time of the filing of this Complaint. 

28. The Director Defendants, along with Defendants Daley, Reynolds, Owen, Roberts, 

Smithburg and Powell, collectively are referred to as Individual Defendants. 

D. The Former Director Defendants 

29. Defendant William Daley (“Daley”) served as a director of the Company from 2004 

to 2011. Daley was a member of the Board’s Public Policy Committee from 2004 to 2009. Upon 

information and belief, Daley is a citizen of Illinois. 

30. Defendant W. Ann Reynolds, Ph.D. (“Reynolds”) served as a director of the 

Company from 1980 to 2010. Reynolds was a member of the Board’s Public Policy Committee from 

1999 to 2009, serving as its Chairman since 2003. Reynolds was also a member of the Board’s Audit 

Committee from 1994 to 2001, and a member of the Nominations and Governance Committee from 

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at least as early as 1997 to 2000 and again from 2003 to 2009. Upon information and belief, 

Reynolds is a citizen of Florida. 

31. Defendant the Rt. Hon. Lord David Owen (“Owen”) served as a director of the 

Company from 1996 to 2010. Owen was a member of the Board’s Audit Committee and 

Nominations and Governance Committee from at least as early as 1997 to 2010. Upon information 

and belief, Owen is a citizen of the United Kingdom. 

32. Defendant Roy Roberts (“Roberts”) served as a director of the Company from 1998 

until 2011. Roberts was a member of the Board’s Public Policy Committee from 1999 to 2011, 

serving as its Chairman in 2010, and was a member of the Board’s Nominations and Governance 

Committee from 1998 to 2011. Upon information and belief, Roberts is a citizen of Michigan. 

33. Defendant William Smithburg (“Smithburg”) served as a director of the Company 

from 1982 to 2011. Smithburg was a member of the Board’s Public Policy Committee from 1999 to 

2003, serving as its Chairman from 1999 to 2002, and was a member of the Board’s Audit 

Committee from 2002 to 2011. Upon information and belief, Smithburg is a citizen of Illinois. 

34. Defendant Boone Powell, Jr. (“Powell”) served as a director of the Company from 

1985 to 2008. Powell was a member of the Board’s Public Policy Committee from 2004 to 2008, 

and was a member of the Board’s Audit Committee from at least as early as 1997 to 2003. Upon 

information and belief, Powell is a citizen of Texas. 

FACTUAL BACKGROUND

A. Abbott’s Drug Business Is Highly Regulated 

1. The FDA Approves Drugs for Specific Uses Only Upon a Showing That the 

Drug is Safe and Effective for That Use 

35. Abbott’s drug business is subject to regulation under the FDCA, 21 U.S.C. §301, et 

seq., and regulations promulgated by the FDA. 

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36. Prior to 1962, drug companies could market their drugs for any use. However, in the 

wake of the realization that the drug Thalidomide, a drug that had been used to treat morning 

sickness in pregnant patients, had caused thousands of children to be born with severe birth defects, 

the FDCA was amended to require drug companies to prove that their drugs are safe and effective 

for specific uses. 

37. Under the FDCA, 21 U.S.C. §§301-97, new pharmaceutical drugs cannot be marketed 

or sold in the United States unless the sponsor of the drug demonstrates to the satisfaction of the 

FDA that the drug is safe and effective for each of its intended uses. 21 U.S.C. §355(a), (d). The 

determination of “safe and effective” is granted to a drug only after clinical testing. The FDA relies 

on information provided by a drug’s manufacturer. Applications for FDA approval (known as New 

Drug Applications or “NDAs”) must include “full reports of investigations which have been made to 

show whether or not such drug is safe for use and whether such drug is effective in use.” 21 U.S.C. § 

355(b)(1)(A). 

38. The FDA approves a drug only if there are “adequate and well-controlled clinical 

investigation[s]” that demonstrate a drug’s safety and effectiveness for its “intended conditions” of 

use. See 21 U.S.C. §355(d)(7). The “intended conditions” for use of a drug are listed in the drug’s 

labeling, which is reviewed and approved by the FDA. See 21 U.S.C. §355(d)(1) & (2). When a 

company seeks to expand the intended conditions of an already approved drug for a new use, it must 

make similarly supported showing. See, e.g., 21 C.F.R. §314.81. 

2. The FDA Prohibits Abbott and Other Drug Companies From Marketing Drugs 

for Off-Label Uses 

39. The FDCA prohibits drug manufacturers from marketing or promoting their drugs for 

uses not approved by the FDA, though physicians may prescribe drugs that have been approved by 

the FDA for any use. See 21 U.S.C. §§ 331, 352, 355; 21 C.F.R. § 314.81. Pursuant to the FDCA’s 

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regulation, drug labels may not describe intended uses for the drug that have not been approved by 

the FDA. 21 U.S.C. §§ 331, 352. The term “drug label” is broadly defined and includes all 

marketing and promotional materials relating to that drug. Id. Illegal “misbranding” can result in 

civil and criminal penalties. See 21 U.S.C. § 333. 

40. Absent an unsolicited request from a physician, federal laws prohibit any advertising 

that recommends or suggests an off-label use for an approved drug. The FDA has interpreted 

“advertising” to include a significant amount of speech that would not typically be considered 

advertising. See Final Guidance on Industry-Supported Scientific and Educational Activities, 62 Fed. 

Reg. 64,074 (Dec. 3, 1997). Specifically, any manufacturer’s speech explaining one of its products is 

considered to be an “advertisement” for the product and is subject to the prohibitions against offlabel marketing contained in 21 C.F.R. §202.1. 

3. Off-Label Marketing Violates the False Claims Act and Numerous State False 

Claims Acts 

41. Many drug prescriptions are paid for by federal health programs such as Medicaid 

and Medicare and are therefore subject to the False Claims Act (“FCA”). Originally enacted in 

1863, the FCA is the most frequently used of a handful of extant laws creating a form of civil action 

known as qui tam, which is an action by an individual not affiliated with the government asserting 

violations of federal law against another private entity. If successful, the qui tam plaintiff, or 

whistleblower, may collect a portion of the penalty assessed against the defendant. 

42. The FCA imposes civil liability upon “[a]ny person” who, inter alia, “knowingly 

presents, or causes to be presented, a false or fraudulent claim for payment or approval” to the U.S. 

Government. 31 U.S.C. §3729(a). Currently, each violation of the FCA subjects the violator to a 

civil penalty of not less than $5,500 and not more than $11,000. In addition, a violator is liable for 

three times the amount of all damages sustained by the U.S. Government. 

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43. Federal government health programs limit their reimbursements for prescription drugs 

to drugs that have been deemed safe and effective under the FDCA. See, e.g., 42 U.S.C. §1396r8(k)(2) (Medicaid) and 42 U.S.C. §1395w-102(e)(1)(A) (Medicare). Off-label marketing violates 

the FCA because it causes false claims for payment to be submitted to the government for 

prescriptions that are not supported by the medical evidence and have not been approved by the 

FDA. The off-label marketing strategies adopted by Defendants fraudulently induced Medicare, 

Medicaid and other federal programs to make billions of dollars in payments for Depakote 

prescriptions that were not approved as safe and effective under the FDCA and should not have been 

paid for by Medicaid or Medicare. As set forth in the Spetter qui tam complaint, off-label 

marketing also violates numerous state False Claims Act laws. These state FCA acts may be 

violated, for example, when a state-administered Medicaid program is induced to make a false 

payment for a drug because of off-label marketing. 

4. The Anti-Kickback Act Also Regulates Abbott’s Marketing 

44. The Anti-Kickback Act (“AKA”) was passed in 1986, the same year the FCA was 

amended, and is part of the same federal government effort to prevent corruption in government 

contracts. 

45. 41 U.S.C. §8702 (formerly 41 U.S.C. §53) provides that: 

“A person may not – 

(1) provide, attempt to provide, or offer to provide a kickback; 

(2) solicit, accept, or attempt to accept a kickback; or 

(3) include the amount of a kickback prohibited by paragraph (1) or (2) in the contract price 

(A) a subcontractor charges a prime contractor or a higher tier subcontractor; or 

(B) a prime contractor charges the Federal Government.” 

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46. 41 U.S.C. §8706 (formerly 41 U.S.C. §55) provides that for each kickback there shall 

be a civil penalty amounting to (1) twice the amount of each kickback involved in the violation plus 

(2) not more than $10,000 for each kickback. 

47. The AKA prohibited Abbott from providing payments or gifts to physicians to induce 

them to prescribe Depakote. 

B. Abbott Flouted the Laws Governing It By Engaging in a Massive Off-Label Marketing 

Scheme Between 1998 and 2009 

 1. Depakote’s Rise and Fall as a Blockbluster Drug and “Cash-cow” for Abbott 

48. There are several different dosage forms for Depakote, but the active ingredient in all 

the Depakote products is valporic acid. Depakene, a liquid form of Depakote, was first approved in 

1978 for the treatment of seizures. Depakote was first approved in 1983 to treat simple and complex 

absence seizures5

 in adult epilepsy. 

49. Depakote Sprinkles is the capsule form of Depakote. It consists of a pull-apart 

capsule and is designed for its contents to be mixed with soft food to assist patients who have 

difficulty swallowing medications in tablet form. It was approved by the FDA in 1989 as safe and 

effective for some expanded types of epileptic seizures. 

50. Depacon is the intravenous form of Depakote. It was approved in 1996 for the 

treatment of patients with (a) complex seizures that occur either in isolation or in association with 

with other types of seizures, (b) for use as a sole and adjunctive therapy in the treatment of patients 

with simple and complex absence seizures, (c) for adjunctive therapy in patients with multiple 

seizures that include absence seizures. 

 

5

 Absence seizures are brief (usually less than 20 seconds), generalized epileptic seizures of sudden 

onset and termination. They have two essential components: (i) clinically the impairment of 

consciousness (absence) and (ii) EEG generalized spike-and-slow wave discharges. 

16

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51. Depakote DR is a delayed-release version of Depakote. The FDA approved Depakote 

DR for treatment of simple and complex absence seizures in adults (1983), manic episodes in adults 

in bipolar disorder, complex partial seizures in adults and children older than ten (1996) and 

prevention of migraine (1996). 

52. Depakote ER (or extended release), was first approved in 2000 for the prevention of 

migraines in adults. In 2003, Depakote ER was approved for the treatment of certain types of 

epileptic seizures for children ages 10-17. In 2005, Depakote ER was approved for the treatment of 

mania episodes of bipolar disorder. The only approved pediatric use of Depakote is for treatment of 

certain specified types of seizures in children ten and older, and approval is only granted for 

Depakote DR and ER. 

53. Depakote has been a huge commercial success for Abbott, generating billions of 

dollars for the Company. 

54. Between 2005 and 2008, the period when Abbott released its figures for U.S. 

Depakote sales, Depakote was a primary driver of Abbott’s economic success, accounting for 

billions in revenue and between 8% and 11% of Abbott’s total domestic revenue. 

Domestic Sales of Depakote

Year Depakote Sales (U.S.) Abbott Total Sales (U.S.)

% of Total U.S. Sales

Contributed by

Depakote

2005 $1 (billion) $12.71 (billion) 8 %

17

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2006 $1.2 (billion) $12.00 (billion) 10 %

2007 $1.50 (billion) $13.25 (billion) 11 %

2008 $1.30 (billion) $14.50 (billion) 9 %

55. Much of Depakote’s success depended on reimbursements paid through federal 

government healthcare programs such Medicaid, Medicare Part D, VA and FEHBP. According to 

the Spetter complaint, Abbott collected almost $8 billion in Medicaid payments alone for 

prescriptions for Depakote products, with the bulk of the reimbursements – almost $5 billion – 

concentrated between 1998 and 2008, the period when Defendants were consciously allowing 

Abbott employees to engage in off-label marketing. 

2. Abbott’s Illegal, Off-Label Depakote Marketing Scheme

56. Several qui tam complaints have been filed, and joined by the U.S. government and 

various state governments, by former sales representatives of Abbott. These whistleblowers detail a 

widespread, centralized scheme at Abbott to engage in off-label marketing of Depakote between 

1998 and 2009 that was “condoned by the highest levels of Abbott management.” 

57. In United States of America ex rel. Thomas J. Spetter, Jr. v. Abbott Laboratories, Inc., 

10-cv-00006 (D. W. Va. Feb. 4, 2011), United States of America ex rel. Meredith McCoyd v. Abbott 

Laboratories, 07-cv-00081 (D. W. Va. Feb. 4, 2011) and United States of America ex rel. Tamara L. 

Dietzler v. Abbott Laboratories, 09-cv-00051 (N.D. Ill. April 7, 2009), the relators made highly 

specific factual allegations that Abbott and numerous Abbott officials engaged in the off-label 

marketing and promotion of the Company’s Depakote products as part of Abbott’s standard 

operating practice and thus, that Abbott and the other defendants breached their fiduciary duties. For 

example: 

• Abbott “engaged in a scheme since January 1, 1998 and continuing until January 1, 2009 to 

submit and/or cause to be submitted hundreds of thousands of false claims to federal and state health 

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care programs by systematically and illegally promoting Depakote®, Depakote Sprinkles®, 

Depakote ER® . . . for unapproved, off-label uses in long-term care facilities, assisted living 

facilities, mental retardation/developmentally disabled . . . facilities and other like facilities . . . 

throughout the United States. . . . These false claims cheated the federal and state Governments out 

of hundreds of millions of dollars that should not have been paid, thereby enriching the Defendants, 

and subject[ing] patients to non-approved, ineffective, and unsafe uses of the Depakote® products.”6

• “Abbott Laboratories . . . methodically and recklessly endangered . . . those with 

Alzheimer’s and other forms of dementia—through the illegal marketing of [Depakote] a drug that 

Abbott knew was unapproved for the treatment of Alzheimer’s, did not work to treat the disease, 

and was actually dangerous for use by the elderly. Incredibly, Abbott did not limit its wrongful 

conduct to preying upon the elderly; it also unlawfully marketed its drug, Depakote, to an array of 

patient populations, including children, placing them at risk for life altering injury or illness.”7

• The majority of the use of the Depakote® products was off-label.8

 For example, by 2000, 

an estimated 85 to 90 percent of the LTC use of Depakote products was off-label. Approximately 

85 percent of this population were Medicare and Medicaid patients.9

58. Between 1998 and 2009, Abbott Labs engaged in off-label promotion of its Depakote 

products in myriad illegal ways, as more fully set forth herein. Specifically, Abbott promoted its 

Depakote products off-label to treat various health issues and diseases, including: 

 

6

 Complaint at ¶ , United States of America ex rel. Thomas J. Spetter, Jr. v. Abbott Labs, 10-cv-00006 (D. W. Va. Feb. 4, 

2011). 

7

 Complaint at ¶1, United States of America ex rel. Meredith McCoyd v. Abbott Labs., 07-cv-00081 (D. W. Va. Feb. 4, 

2011) (emphasis added).

8 Ex rel. Spetter Complaint at ¶ 91. 

9 Id. at ¶ 141. 

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i. To treat aggression in adults and children who were mentally retarded and/or 

developmentally disabled, although the FDA never approved Depakote to treat 

aggression in any patient population;10

ii. For the treatment of psychiatric conditions in children and adolescents;11

iii. For the adjunctive treatment of schizophrenia;12

iv. For the management and treatment of substance abuse in bipolar disorder;13

v. For the treatment of post-traumatic stress disorder and intermittent explosive 

disorder;14

vi. For the treatment of borderline personality disorder;15

vii. For the treatment of bipolar depression;16

viii. For the treatment of “symptoms of mania”;17

ix. Promoting Depakote ER for uses for which only Depakote had received 

approval.18

 

10 Ex rel Spetter Complaint at ¶¶ 314-22. 

11 Id. at ¶¶ 340-45. 

12 Id. at ¶¶ 297-312; Dietzler Complaint at ¶¶ 81-85. 

13 Id. at ¶¶ 333-34; Ex rel. McCoyd Complaint at ¶¶ 204-07. 

14 Ex rel. Spetter Complaint at 335-39. 

15 Id. at ¶¶ 346-50. 

16 Id. at ¶¶ 351-53; Ex rel. McCoyd Complaint at ¶¶ 175-94. 

17 Ex rel. Spetter Complaint at ¶¶ 354-56. 

18 Id. at ¶¶ 357-60. 

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59. Abbott Labs illegally marketed and promoted Depakote, Depakote Sprinkles and 

Depakote ER for the treatment of agitation and aggression associated with dementia in the elderly 

and for numerous other conditions.19

60. Abbott Labs “regularly engaged in deceptive and misleading promotion of the safety 

of the Depakote® Products, even downplaying serious known health risks. Sales representatives 

were instructed to detail the fact that Depakote® Products were safe to use and had fewer side 

effects than competing drugs” when there was no evidence that this was true. In fact, Depakote is a 

black box drug that needs to be closely monitored by the treating physician. “Abbott engaged in a 

widespread promotion of the Depakote® Products as safe to treat the elderly suffering from 

dementia despite having warnings on the label against the risks of such use.”20

61. “Since at least 1998, Abbott’s sales representatives were to (and did) provide 

healthcare professionals nationwide with Abbott-approved materials to influence the off-label 

prescribing of the Depakote® Products, including ‘approved’ clinical studies, industry supplements, 

and [Continuing Medical Education] CME materials.”21 Executives at Abbott failed to comply with 

the regulatory requirement that Abbott submit such promotional materials to the FDA for approval. 

62. Abbott designed its promotion to influence physicians to write more prescriptions for 

the Depakote products, including for numerous off-label uses. Abbott’s sales representatives were 

trained that they were selling the validity of both Abbott’s study and Depakote at the same time.22

 

19 Id.at ¶¶75-78. 

20 Id. at ¶ 90. 

21 Id. at ¶ 107. 

22 Id. at ¶ 108. 

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63. For the reasons more fully set forth below, Abbott violated myriad federal and state 

laws and regulations. In addition, Abbott also violated its own internal policies and procedures, or in 

some instances, failed to implement any such policies and procedures. Abbott knowingly, 

fraudulently and illegally marketed and promoted its Depakote products for unapproved, off-label 

uses. 

i. Between 1998 and 2009, Abbott Maintained the LTC Sales Force to 

Laud Off-Label Uses of Depakote and to Manipulate Healthcare 

Professionals 

64. In January 1998, the Neuroscience Franchise of the Pharmaceutical Division of 

Abbott Labs created a special cadre of sales persons known as the LTC (Long Term Care) Sales 

Force to market Depakote and Depakote Sprinkles. The LTC Sales Force later marketed Depakote 

ER. 

65. Abbott created the LTC Sales Force specifically to maximize sales for agitation and 

aggression associated with the treatment of elderly patients with dementia, a symptom for which 

there was no evidence Depakote provided any relief. Moreover, the targeted patients, elderly 

persons with dementia who were largely institutionalized, were particularly vulnerable to suffering 

medicinal side effects, and required careful monitoring.23 Members of the LTC Sales Force were 

expressly instructed to ignore previous instructions to only sell Depakote on-label. Instead, they 

were told that their primary sales opportunities would be to sell Depakote off-label for agitation and 

aggression in the treatment of dementia.24

 

23 Id. at ¶ 113. 

24 Id. at ¶ 115.

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66. Furthermore, Abbott trained its LTC Sales Force to use the following techniques 

and/or enhancements to increase the sales of Depakote: 

a. Up-front discounts through a charge-back system to minimize customer outlays and 

avoid rebate calculations; 

b. Rebate contracts based on market share performance; 

c. Bundled product deals in connection with programs implemented to affect market 

share performance favorably for a particular product or products; 

d. Extended dating, which allowed pharmacy providers to improve cash flow by 

deferring payments; 

e. Price protection (purportedly within the scope of applicable state and federal rules); 

and 

f. Availability of specialized packaging intended for the LTC market.25

67. Abbott further instructed its LTC Sales Force to provide myriad kickbacks, unrelated 

to drug contracting, specifically to influence pharmaceutical market share in the nursing facility 

through control over physician prescribing habits and access to nursing facility patients by providing 

value-added programs, including: 

a. Regional/local educational symposia for physicians and nurses; 

b. Nursing in-service programs; 

c. Market research; 

d. Clinical research; 

e. New product information; 

 

25 Id. at ¶ 116. 

23

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f. Advisory boards; and 

g. Support for clinical programs (formulary maintenance, therapeutic interchange 

programs, disease management programs, and targeted therapeutic recommendations).26

68. When Abbott first introduced its LTC Sales Force in 1998, it was comprised of 

approximately 30 Charter Members. By 2001 it had expanded to 60 sales representatives and by 

2003, it had ballooned to over 100 such sales representatives. As the number of LTC Sales Force 

sales representatives promoting off-label uses increased, so too did the sales associated with off-label 

uses.27

69. In 2004, to disguise its off-label promotion of Depakote products from regulatory 

bodies, Abbott merged the LTC Sales Force into its hospital group and renamed the new, combined 

group as its Special Account Executive Institutional Sales Group. The name change did not alter 

Abbott’s course of illegal off-label promotion and marketing; Abbott continued to promote illegal, 

off-label uses of Depakote.28

70. On January 1, 2009, Abbott eliminated the Special Account Executive Institutional 

Sales Group.29

ii. Abbott’s Improper Use of Misleading Clinical Studies to Support Off-

 Label Uses for Depakote Products 

71. As part of its fraudulent and misleading marketing scheme, Abbott funded a placebocontrolled, randomized study, M97-738. If this study produced favorable results, Abbott planned on 

 

26 Id. at ¶ 117. 

27 Id. at ¶ 120.

28 Id. at ¶ 121. 

29 Id. at ¶ 123.

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using it in its application with the FDA to promote its Depakote products for mania associated with 

dementia. Instead of waiting for the final results and any FDA approval, however, Abbott began 

promoting the results in advance. Abbott even released an internal update, to its LTC Sales Force, 

detailing the M97-738 Study. To facilitate this Study, Abbott dispatched a team of Neuroscience 

Medical Liaisons to visit all of the nursing home clinical sites to conduct in-services with the staff. 

Essentially, these were just additional off-label presentations for Abbott’s Depakote products.30

72. The “advantage” for targeting nursing homes with elderly institutionalized patients 

for use of Depakote to, in effect, chemically sedate agitated patients was that such prescriptions 

could be filled on a “standing order” basis. That means that a physician need not see the patient 

every time the drug is prescribed. If the patient is perceived to be agitated, Depakote can be 

prescribed by a health care worker as a “standing order.” While the advantage for sales figures of the 

use of “standing orders” is that it can drive the usage of Depakote very quickly, the obvious 

disadvantage for the elderly, often frail population in nursing homes who are susceptible to side 

effects is that they are often left without close medical monitoring.31

73. The principal investigator for this M97-738 Study, Dr. Pierre Tariot, was a paid 

Abbott consultant. On July 21, 1998, Dr. Tariot announced the preliminary results of this Study, 

reporting that “[m]edicines commonly used to treat epilepsy and other seizure disorders appear to be 

effective at soothing the agitation in people with Alzheimer’s disease and other forms of 

dementia.”32

 

30 Ex rel. Spetter Complaint at ¶¶ 173-74. 

31 Ex rel. Spetter Complaint at ¶¶ 270-74. See also Dietzler Complaint at ¶ 65F. 

32 Ex rel. Spetter Complaint at ¶ 175. 

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74. In stark contrast to his announced preliminary results, Dr. Tariot’s final results were 

not positive. Due to a disproportionate number of dropouts from the Study (seemingly due to 

excessive patient somnolence and weight loss), the M97-738 Study had to be terminated prior to its 

full enrollment. This termination renders the study “negative,” and it could not even be presented to 

the FDA. Nevertheless, Abbott executives steadfastly and stubbornly insisted that the Study would 

be used to promote Depakote products for off-label uses, specifically, in the treatment of elderly 

patients with dementia who exhibited mania symptoms. Abbott provided thousands of copies of the 

“results” of its M97-738 Study to its LTC Sales Force for distribution in its off-label promotion.33

75. Abbott’s LTC Sales Force was instructed to laud the merits of the M97-738 Study, 

even though Abbott executives knew that the Study was deemed “negative” due to its early 

termination. Abbott instructed the LTC Sales Force to explain that the Study demonstrated “the 

safety, efficacy and ease of use in treating agitation and aggression in dementia patients.” The LTC 

Sales Force was even instructed to misrepresent and try to “explain away” the somnolence and 

weight loss issues demonstrated by the Study. Again, this promotion was off-label and illegal.34

76. In 2005, Dr. Tariot reported a study in which he found that Depakote showed “no 

benefit” for the treatment of agitation in dementia. The trial for this study was actually completed in 

2002, but Abbott executives refused to release the results for approximately three years. 

Furthermore, Abbott never provided reprinted copies of this clear negative study to its sales 

representatives for dissemination.35

 

33 Id. at ¶¶ 176-77, 179. 

34 Id. at ¶ 180. 

35 Id. at ¶ 188.

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77. In addition to the failed M97-738 Study led by Dr. Tariot, Abbott also funded and 

relied on other studies to promote the off-label use of its Depakote products. This includes the M98-

817 Study led by Dr. Anton Porsteinsson where Abbott again leaked results early, misrepresented 

the results and ultimately used the study for promotion of off-label uses. Perhaps worse, Abbott 

actually used the results of this M98-817 Study to quell the negative aspects of its M97-738 Study, 

even though the M98-817 Study specifically stated that it did not prove that such drugs would 

actually achieve the represented goal. 36

iii. Abbott Improperly Promoted Off-Label Uses of Depakote With Journal 

Supplements 

78. Abbott also used non-peer-reviewed articles appearing in supplements to medical 

journals to promote off-label uses of Depakote. Abbott again organized a Continuing Medical 

Education (“CME”) seminar to present information that appeared to be, but was not, free from 

Abbott’s influence. Specifically, they were funded by unrestricted educational grants by Abbott and 

were authored by Abbott-paid consultants. Three such articles were: 

i. A 1999 article entitled “Phenomenology and Treatment of Aggression Across 

Psychiatric Illnesses,” an article funded by an unrestricted educational grant by Abbott and the 

authors of which both were consultants paid by Abbott; 

ii. A February 2001 article entitled “Bipolar Disorder & Impulsive Spectrum Letter,” 

again funded by an unrestricted educational grant by Abbott and again authored by a consultant paid 

by Abbott; and 

 

36 Id. at ¶¶ 181-87.

27

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iii. An April 2005 article entitled “Case Studies: Management of Epilepsy in Persons 

With Intellectual/Developmental Disabilities With or Without Behavioral Problems,” which again 

was funded by an Abbott grant and authored by Abbott-paid researchers. 37

79. Similarly, Abbott’s LTC Sales Force published summaries of studies as supplements 

to journals. The LTC Sales Force also distributed thousands of copies of such supplements to 

healthcare professionals as part of their off-label promotional details for Depakote products.38

iv. Abbott Bribed “Key Opinion Leaders” to Increase Sales of Depakote for 

Off-Label Uses 

80. Abbott’s LTC Sales Force and subsequent Special Account Executive Institutional 

Sales Group developed a core marketing strategy of identifying “key opinion leaders,” who were 

physicians who would influence their peers’ medical practice and especially their prescription habits. 

Abbott provided these “key opinion leaders” with a multitude of improper and illegal kickbacks, 

including sports tickets, dinners, golf outings, speaker honoraria and long term consulting 

agreements. In exchange for these kickbacks, the “key opinion leaders” would provide advocacy 

and key marketing feedback and activities in support of Abbott’s Depakote products. Abbott even 

assigned the “key opinion leaders” into three levels; the higher the level, the better or more valuable 

the kickback would be.39

v. Abbott Improperly Used Speaker Presentations to Promote Off-Label 

 Uses of Depakote 

 

37 Id. at ¶¶ 189-92. 

38 Id. at ¶ 193. 

39 Id. at ¶¶ 195-98. See also Dietzler Complaint at ¶¶ 128-66. 

28

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81. Promotional programs funded by pharmaceutical companies like Abbott are highly 

regulated by the FDA. Such programs must be on-label, must contain a “fair balance” of 

information regarding the drug and must be truthful and not misleading, among other requirements.40

82. Beginning in at least as early as 1998, Abbott, via its LTC Sales Force, set up 

hundreds of speaker programs for healthcare professionals at which illegal, off-label promotional 

presentations were made, in direct violation of FDA regulations. Abbott selected and compensated 

the speakers. In other words, these speaker programs were another way that Abbott illegally and 

improperly developed “key opinion leader” product allegiance.41

vi. Abbott Improperly Used CMEs to Further Promote Depakote Off-Label 

Uses 

83. CME courses, usually local medical lectures featuring “key opinion leaders,” are a 

valuable source of information for physicians. The standards promulgated by the Accreditation 

Council for Continuing Medical Education (“ACCME”), however, require that CMEs be 

independent from drug companies. The ACCME also requires that independent educational grants 

cannot be tied to the purchase, sale, prescription or recommendation of the company’s products, 

there can be no price concessions and there can be no payments to ensure that the grant recipient 

markets the company’s drugs during the educational program.42

 

40 Ex rel. Spetter Complaint at ¶ 199. 

41 Id. at ¶¶ 201-21.

42 Id. at ¶¶ 222-23, 225. See also Dietzler Complaint at ¶ 65G; Ex rel. McCoyd Complaint at ¶¶ 129-53. 

29

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84. Abbott regularly violated the requirements set forth by the ACCME, its own 

guidelines and the FDA guidance by manipulating the CME programs into blatant promotional 

events for off-label uses of Depakote products.43

85. Beginning at least as early as 1998, Abbott contracted with ABcomm, Inc., to set up 

CME programs using recognized clinical experts, well recognized in their field (“key opinion 

leaders”), to conduct CMEs and product promotional programs. Indeed, until at least 2005, Abbott 

had exclusive control over which speakers were selected for the ABcomm CME programs. 

Furthermore, Abbott had complete control over the topics and slides such speakers were permitted to 

use, as well as what audience would be invited to hear the presentations. In every conceivable way, 

Abbott controlled these CME programs. Again, Abbott illegally and improperly used these CME 

programs not to educate as to the fair approved uses of Depakote, but to promote its off-label uses.44

86. Abbott’s relationship with ABcomm is obviously inappropriate. With respect to these 

CME programs, ABcomm was merely a puppet of Abbott. To receive funding in the form of 

“educational grants” from Abbott, ABcomm had to follow Abbott’s orders, with respect to topics, 

speakers and all other conceivable issues that Abbott could control.45

vii. Abbott Falsified Medical Education Requests for Off-Label Information 

About Depakote Products to Increase Sales of Depakote for Such OffLabel Uses 

87. Abbott also increased off-label promotion of its Depakote products by manipulating 

requests for “Medical Education Requests” from the Abbott Medical Information Department. A 

 

43 Ex rel. Spetter Complaint at ¶ 227. 

44 Id. at ¶¶ 228-29, 240-58.

45 Id. at ¶¶ 230, 232. 

30

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“Medical Education Request” is Abbott’s in-house term for a physician request for off-label 

information for one of Abbott’s drugs.46

88. With respect to the Company’s Depakote products, Abbott’s management encouraged 

sales representatives to solicit Medical Education Requests to make it appear that physicians had 

asked for this information, when in reality, it was merely the sales representative generating the 

Request. Abbott even ran internal sales contests to see which sales representative could get the most 

Medical Education Requests. Thousands of these Medical Education Requests for off-label 

information about Depakote products were improperly solicited from physicians. Abbott executives 

knew or should have known that this conduct was illegal and improper, but because the practice 

generated increased sales of Depakote products, Abbott encouraged it.47

viii. Abbott Improperly Generated Scientific “Evidence” to Support Off-

 Label Uses of Depakote 

89. Abbott executives carefully crafted pre-determined, easily marketable “key 

messages,” to support off-label use of Depakote products, instead of utilizing scientific evidence 

derived from unbiased scientific inquiry. One such example of this was Abbott’s fraudulent 

promotion of the neuroprotective effects of its Depakote products, which Abbott trained its LTC 

Sales Force to utilize as a centerpiece of Abbott’s fraudulent marketing scheme. An article entitled, 

“Neuroplasticity and cellular resilience in mood disorders,” whose author was Manji, was not peerreviewed, not a double-blind study, and suggested that Abbott’s Depakote products exhibited 

neuroprotective effects. Despite the obvious flaws of the Manji article, Abbott instructed its LTC 

 

46 Id. at ¶ 265. 

47 Id. at ¶¶ 266-69.

31

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Sales Force to utilize it to support Abbott’s position of off-label uses of its Depakote products, 

especially for treatment of Alzheimer’s.48

ix. Abbott Uses In-Services to Promote Off-Label Uses of Depakote 

90. Abbott’s LTC Sales Force also conducted in-services for nursing home staff and 

consultant pharmacists. At these in-services, Abbott sales representatives illegally promoted 

Depakote products for off-label uses.49

91. Abbott also funded a 1998 CME in-service on a CD, which included a videotape 

entitled “Treatment of Aggression in Elderly Dementia Patients.” In the videotape presentation, 

again, funded by Abbott, the physicians inevitably selected Depakote as the drug to best treat the 

elderly patient’s aggression associated with dementia. This presentation, as well as the entire 

contents of the CD, promoted off-label uses of Depakote products. 50

92. Abbott created (and funded) other in-services on CD that depicted similar situations 

to that discussed above. All of these presentations illegally promoted off-label uses of Depakote 

products.51

x. Abbott’s Improper Detailing of Depakote Products to Healthcare 

Professionals and Improper Targeting of Their Pharmacy and 

Therapeutics Committees

93. Abbott, per the Government, also engaged in unlawful “detailing” of its Depakote 

products. Detailing is the one-on-one promotion of drugs to physicians by pharmaceutical sales 

representatives, usually through regular office visits, free gifts, and friendly advice, when drug 

 

48 Id. at ¶¶ 279-80. 

49 Id. at ¶ 152. 

50 Id. at ¶ 153. 

51 Id. at ¶¶ 154-58.

32

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representatives go directly to physicians’ offices to describe the benefits of a specific drug. While 

detailing is a lawful practice, if engaged in to promote the tested and FDA-approved uses of the 

drug, Abbott executives incentivized its sales force, on a nationwide basis, to go well beyond the 

lawful boundaries of detailing. The “detailing” included “lunch ’n learns,” breakfasts, dinner 

meetings, preceptorships, grand rounds, mini-fellowships and in-service training for the purposes of 

disseminating Depakote products’ brand message of off-label uses and thereby increasing sales.52

94. Many healthcare organizations, including hospitals, institutional pharmacies, state 

Medicaid agencies and managed healthcare organizations maintain lists of preferred drugs that can 

be prescribed by healthcare professionals in that organization or which are eligible for 

reimbursement by that organization, which lists are commonly referred to as “formularies.” The 

Pharmacy and Therapeutics (“P&T”) Committee of such an organization decides which drugs should 

be included in a formulary. These P&T Committees are designed to be independent and are in place 

specifically to look out for the best interests of patients. P&T Committees are instructed to avoid 

conflicts when making formulary decisions. 53

95. Abbott, through its LTC Sales Force, routinely engaged in promotions to P&T 

Committees to add Depakote products to their formularies. Abbott sales representatives: (1) singled 

out P&T Committee members for special attention to influence their decisions to add Depakote to 

their formularies; (2) provided details and in-services to P&T Committee members touting the offlabel uses of the Depakote products; and (3) called on P&T Committee members for special 

promotions when a formulary decision was pending to add Depakote ER, including unsupported 

 

52 Id. at ¶ 142, 145. 

53 Id. at ¶ 146. 

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superiority claims concerning Depakote ER.54 In January, 2009, Abbott’s Regulatory Manager Rick 

Leber was issued a Warning Letter that described how Abbott used a Flashcard for pharmacy 

formularies that misstated the uses of Depakote ER over Depakote to push pharmacies to use the 

extended release product that still had six months left of patent protection over the July 2008 patent 

expiration of non-extended use or ordinary Depakote. (Infra ¶ 132). 

xi. Abbott Funded the Development and Use of Clinical Practice Guidelines 

to Tout Off-Label Uses of Depakote and to Mislead Healthcare 

Professionals 

96. A vital aspect of Abbott’s scheme for off-label promotion of its Depakote products 

was the development and use of “clinical practice guidelines” (“CPGs”). CPGs are summaries of 

“expert opinions” which are often used to identify standards of care, an important source of drug 

information for physicians. CPGs are typically formulated by panels of experts who are, however, 

partially or fully supported financially by pharmaceutical manufacturers like Abbott. CPG expert 

panelists also often have economic ties to the drug industry via research grants or speaker fees.55

97. In April 1998, with partial financial support from Abbott, McGraw Hill published 

purportedly “independent” CPGs entitled, “Treatment of Agitation in Older Persons with Dementia, 

A Postgraduate Medicine Special Report.” These CPGs were updated in 2001 and again in 2005; 

both updates were also funded by Abbott.56

98. The CPGs published by McGraw Hill provided a set of dementia management 

guidelines for physicians treating the elderly. These CPGs required the use of the most expensive 

drugs on the market including Depakote, Depakote Sprinkles and (after FDA approval in 2000) 

 

54 Id. at ¶ 147. 

55 Id. at ¶¶ 124-25. 

56 Id. at ¶ 128.

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Depakote ER as first-line treatment for dementia patients, even though this was not a use approved 

by the FDA.57

99. The initial creation of these McGraw Hill CPGs was underwritten by educational 

grants from Abbott and other pharmaceutical companies. Among the “Expert Consensus Panelists” 

were numerous physicians with financial relationships with Abbott. Improperly, the CPGs failed to 

disclose any of these relationships.58

100. Once these partially Abbott-funded CPGs were released with the headline Abbott 

wanted (Depakote as first line treatment for off-label uses), Abbott provided major funding to 

disseminate copies of these CPGs to healthcare professionals caring for LTC patients throughout the 

United States. For one example, Abbott hired Insight Therapeutics, LLC to produce a “pocket” 

version of these CPGs to be used as part of the CME courses that Abbott sponsored. Abbott 

sponsored this pocket guide via an unrestricted educational grant. In essence, Abbott paid for this 

pocket guide, and then used it extensively to promote off-label uses of the Depakote products. 

Similarly, Insight Therapeutics also produced a CD version of these CPGs, again funded by an 

Abbott educational grant. Abbott controlled all of the content in this CD, which again promoted offlabel uses of the Depakote products.59

101. These same CPGs were also transformed—again partially via Abbott financial 

support—into a promotional piece entitled “Treatment of Dementia and Agitation: A Guide for 

Families and Caregivers.” This piece unabashedly promoted the off-label use of Depakote.60

 

57 Id. at ¶ 129. 

58 Id. at ¶¶ 130-31. 

59 Id. at ¶¶ 132-34. See also Dietzler Complaint at ¶ 65B.

60 Ex rel. Spetter Complaint at ¶ 136. 

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102. Abbott’s LTC Sales Force regularly used the pocket guide and CD containing the 

CPGs in their promotion of off-label uses of Depakote products to healthcare professionals, 

specifically as first-time treatment of the elderly suffering from agitation and aggression associated 

with dementia.61

103. Through these various CPG-related tools, all at least partially funded by Abbott, 

Abbott deliberately engaged in the illegal promotion of its Depakote products for off-label uses. 

Abbott deliberately bypassed governmental safeguards and scientific review.62

104. As a result of its illegal off-label promotions, sales of Abbott’s Depakote products 

soared. 

xii. Abbott’s Improperly Paid Physicians of Preceptorships Monies to 

Induce Them into Prescribing Depakote Products 

105. Abbott’s LTC Sales Force also paid key high-decile physicians to perform 

preceptorships to influence their prescribing of Depakote products. These preceptorship 

arrangements are in direct violation of the Anti-Kickback Act. See “OIG Compliance Program 

Guidance for Pharmaceutical Manufacturers,” 68 Fed. Reg. 23731.63

xiii. Abbott Improperly Used OBRA-87 Limits on “Unnecessary Drugs” to 

Promote Off-Label Uses of Depakote in Long-Term Care Facilities 

106. The Omnibus Budget Reconciliation Act of 1987 (“OBRA-87”) requires each LTC 

facility to employ an outside consulting pharmacist to be responsible for the quality of 

pharmaceutical services. OBRA-87 prohibits the use of unnecessary drugs and also addresses the 

use of anti-psychotic drugs. Residents at LTC facilities who have not previously received anti-

 

61 Id. at ¶ 135. 

62 Id. at ¶ 137.

63 Id. at ¶¶ 159-62. 

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psychotic drugs are specifically prohibited from receiving them unless such therapy is necessary to 

treat a specific condition, as diagnosed and documented in the resident’s clinical record.64

107. Beginning at least as early as 1999, Abbott developed a plan to promote the Depakote 

products’ off-label use as superior to psychotropic drugs, using OBRA-87 limits as the focal point. 

OBRA-87 did not designate Depakote products as being anti-psychotic. Thus, Abbott’s marketing 

scheme highlighted: (1) the off-label use of the Depakote products as replacements for antipsychotics and anti-anxiety medications; and (2) the flexibility enjoyed by prescribing the Depakote 

products off-label, which did not exist with traditional anti-psychotics that were subject to OBRA87’s limits.65

C. Defendants Had a Duty to Know How Depakote, a Key Product, Was Being Marketed, 

Did Know How It Was Marketed and Consciously Allowed Unlawful Off-Label 

Practices to Continue 

1. Duties of the Company Directors 

108. Each Individual Defendant, as a current or former director of the Abbott Board of 

Directors, knew, from Abbott’s recent history of substantial fines and penalties, and the FDA’s new 

aggressive enforcement of off-label marketing prohibitions, the importance to a pharmaceutical 

company of maintaining strict and effective oversight of its employees to ensure compliance with 

federal and state marketing laws and regulations. 

109. By reason of their positions as Directors of the Company, the Individual Defendants 

owed the Company and its shareholders fiduciary obligations of trust, loyalty, good faith and candor, 

and were and are required to use their utmost ability to control and manage the Company in a fair, 

 

64 Id. at ¶¶ 163-67; 42 C.F.R. § 483.60. 

65 Ex rel. Spetter Complaint at ¶¶ 168-70. See also Ex rel. McCoyd Complaint at ¶¶ 84-97.

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just, honest and equitable manner. The Individual Defendants were and are required to act in 

furtherance of the best interests of the Company and its shareholders so as to benefit “the long term 

and short term interests of the corporation,” 805 Ill. Comp. Stat. 5/8.85 which includes, of course, 

the obligation that the Company act in compliance with the law and ethical good behavior. 

110. Pursuant to 805 Ill. Comp. Stat. 5/8.75 which sets forth the grounds on which 

directors of Illinois corporations may be indemnified, each Individual Defendant has a duty to “act in 

good faith and in a manner he or she reasonably believe[s] to be in or not opposed to the best 

interests of the corporation” and “with respect to any criminal action or proceeding, ha[s] no 

reasonable cause to believe his or her conduct was unlawful.” 

111. At all times relevant hereto, each of the Individual Defendants was the agent of each 

of the other Individual Defendants and of the Company, and was at all times acting within the course 

and scope of such agency. 

112. According to Abbott’s Corporate Governance Guidelines, the Abbott Board is 

required to “comply with all laws, rules and regulations applicable to their capacity as directors of 

Abbott,” and to “report violations of laws, rules, regulations or the Code of Business Conduct to the 

Chairman of the Board and Chief Executive Officer, the Vice President and Chief Ethics and 

Compliance Officer, or any other appropriate Abbott personnel.” Furthermore, the Governance 

Guidelines state that “[e]ach director shall have complete access to Abbott’s management. Abbott’s 

management will make itself available to answer the directors’ questions about Abbott between 

meetings.” 

113. In addition to the Governance Guidelines, Abbott’s Code of Business Conduct (the 

“Code”), which applies to Individual Defendants, emphasizes Abbott’s “core values of honesty, 

fairness and integrity.” For example, the Code provides: 

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Principle 8: Compliance With Laws

We are required to familiarize ourselves with all the laws, rules and regulations that 

apply in the areas within the scope of our work responsibilities, including, as 

applicable, the following areas. Contact the Legal Division for advice in any area 

where you have questions. 

Food and Drug Laws

We must comply with all applicable laws, rules, regulations, consent decrees and 

other orders of the United States Food and Drug Administration and any other 

similar governmental authorities in other countries where Abbott does business 

governing research, development, manufacture, distribution and promotion of foods, 

drugs, medical devices, diagnostic products, nutritional products or biological 

products. 

*** 

Laws Relating to Government Health Care Programs

We must comply with the laws relating to government health care programs in each 

country where Abbott does business. 

In the United States, its territories and possessions, and Puerto Rico, many Abbott 

products are reimbursed or purchased by Federal Health Care Programs -- programs 

that include Medicare, Medicaid, Department of Defense and Department of 

Veterans Affairs health care programs, and many other Federal or Federally-funded 

programs that pay for health care items and services. These programs are regulated 

through a variety of laws affecting the coverage and reimbursement of Abbott 

products, as well as the sale and marketing of those products. 

Abbott is committed to full compliance with all Federal Health Care Program 

requirements, including the following: 

Federal Anti-kickback Statute

The laws that regulate these programs include the Federal anti-kickback 

statute, which applies both to our sales and marketing activities and to a 

broad range of other activities, including grants, research contracts, and 

consulting agreements. It generally prohibits offering or paying (or soliciting 

or receiving) cash or other benefits to induce the purchase, order, or 

recommendation of products eligible for payment by a Federal Health Care 

Program. 

[T]o ensure Abbott’s compliance with the anti-kickback statute, we must 

carefully evaluate and properly structure any arrangements with parties in a 

position to prescribe, purchase or recommend Government-reimbursed 

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products (for example, physicians, hospitals, nursing facilities, HMOs, 

PGMs, GPOs, or pharmacies), and must always avoid any arrangements that 

could inappropriately influence treatment or purchasing decisions. 

False Claims Laws

The civil False Claims Act and other statutes prohibit knowingly or 

recklessly submitting false claims to the Government, or causing others to 

submit false claims. Accordingly, we must exercise care to ensure that we do 

not submit any inaccurate or otherwise improper claims for payment to the 

Government, or cause others to do so. Abbott contracts with Government 

customers and must avoid submitting any claims for payments not properly 

due. While Abbott does not itself submit claims to insurance programs like 

Medicare and Medicaid, many of our customers do. We must avoid any 

conduct that could lead customers to submit false claims by following 

procedures carefully designed to ensure that any information we provide to 

customers about Medicare or Medicaid reimbursement for our products is 

accurate and otherwise proper. 

*** 

Civil Monetary Penalties Law

This law authorizes the imposition of civil monetary penalties for a variety of 

conduct. . . . 

Failure to adhere to Federal Health Care Program requirements, or to related Abbott 

standards, policies and procedures, can have a number of serious consequences, both 

for Abbott and for the individuals involved. . . . [V]iolation of these laws may result 

in exclusion of Abbott or individual employees from participation in Federal 

Health Care Programs. (emphasis added). 

114. There are five committees of the Abbott Board of Directors which further delineate 

the additional duties of the Directors who serve on those committees: the Executive Committee, the 

Audit Committee, Compensation Committee, Nominations and Governance Committee and Public 

Policy Committee. 

115. Director Defendants Austin, Scott and Tilton all served on the Audit Committee from 

2007 until the present, and former directors Owen, Smithburg and Powell served on the Audit 

Committee from 1997-2010, 2002-2011, and 1997-2003 respectively. As such, each of these 

Individual Defendants had a specific duty to “assist the Board in fulfilling its oversight responsibility 

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with respect to . . . legal and regulatory compliance as it relates to financial matters, including 

accounting, auditing, financial reporting, and securities law issues.” Audit Committee Charter ¶1. 

In addition, Defendants Austin, Scott, Tilton, Owen, Smithburg and Powell, as members of the Audit 

Committee, had a duty “to assist the Board in fulfilling its oversight responsibility with respect to . . . 

Abbott’s enterprise risk management, including major financial risk exposures. . . .” 

116. Director Defendants Austin and Alpern served on the Public Policy Committee from 

2003 to the present, and 2009 to the present respectively, and former directors Daley, Smithburg and 

Powell served on the Committee from 2004 to 2009, 1999-2003 and 2004-2008 respectively. While 

the exact wording of the Public Policy Committee Charter changed somewhat over time, its purpose 

always remained the same, and that was “to assist the Board in fulfilling its oversight responsibility 

with respect to public policy (including regulation by the Federal Food and Drug Administration

as well as other domestic, foreign and international regulatory bodies) and government affairs and 

healthcare compliance issues that affect Abbott . . . .” (Emphasis added). 

2. At All Times, Defendants Knew That Off-Label Marketing Was Illegal and a 

Major Risk for the Company 

 

117. As described above, the overlapping prohibitions on off-label marketing imposed by 

the Food, Drug and Cosmetic Act, the False Claims Act, the Anti-Kickback Act and regulations 

promulgated by them, the FDA and Medicare/Medicaid were long-standing and prominent aspects of 

Abbott’s pharmaceutical business, and each Defendant was well aware of these prohibitions and the 

importance to the Company to comply with these laws. 

118. Each Defendant was keenly aware of the prohibition on off-label marketing. For 

example, Defendants White, Fuller, Austin, Farrell, Scott, Tilton, Osborn, Daley, Reynolds, Owen, 

Roberts, Smithburg and Powell described in Abbott’s SEC Form 10-K for the year ending December 

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31, 2007, which each Defendant signed, that this prohibition was a fundamental aspect of Abbott’s 

business: 

The development, manufacture, sale, and distribution of Abbott's products are 

subject to comprehensive government regulation. Government regulation by 

various federal, state, and local agencies, both domestically and abroad, which 

includes detailed inspection of, and controls over, research and laboratory 

procedures, clinical investigations, product approvals and manufacturing, marketing 

and promotion, sampling, distribution, record keeping, storage, and disposal 

practices, and achieving compliance with these regulations, substantially increases 

the time, difficulty, and costs incurred in obtaining and maintaining the approval to 

market newly developed and existing products. Government regulatory actions can 

result in delay in the release of products, seizure or recall of products, suspension 

or revocation of the authority necessary for their production and sale, and other 

civil or criminal sanctions. In addition, governmental regulatory agencies require 

prescription drug and medical device manufacturers to pay fees, such as application, 

product, and establishment fees. 

119. Similarly, the 2007 SEC Form 10-K stated: 

Abbott is subject to numerous governmental regulations and it can be costly to 

comply with these regulations and to develop compliant products and processes. 

* * * 

Abbott’s products are subject to rigorous regulation by the U.S. Food and Drug 

Administration, and numerous international, supranational, federal and state 

authorities. The process of obtaining regulatory approvals to market a drug or 

medical device can be costly and time-consuming, and approvals might not be 

granted for future products, or additional indications or uses of existing products, on 

a timely basis, if at all. 

* * * 

Abbott must incur expense and spend time and effort to ensure compliance with 

these complex regulations. Possible regulatory actions could include warning 

letters, fines, damages, injunctions, civil penalties, recalls, seizures of Abbott's 

products and criminal prosecution. These actions could result in, among other 

things, substantial modifications to Abbott's business practices and operations; 

refunds, recalls or seizures of Abbott's products; a total or partial shutdown of 

production in one or more of Abbott's facilities while Abbott or Abbott's suppliers 

remedy the alleged violation; the inability to obtain future pre-market clearances or 

approvals; and withdrawals or suspensions of current products from the market. Any 

of these events could disrupt Abbott’s business and have a material adverse effect on 

Abbott's revenues, profitability and financial condition. 

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120. The 2007 SEC Form 10-K also acknowledged each Defendant’s awareness of the 

regulations imposed by Medicaid and Medicare and the need for Abbott to comply with the antikickback and false claims laws: 

Laws and regulations affecting government benefit programs could impose new 

obligations on Abbott, require Abbott to change its business practices, and restrict 

its operations in the future. 

Abbott’s industry is also subject to various federal, state and international laws and 

regulations pertaining to government benefit program reimbursement, price 

reporting and regulation, and health care fraud and abuse, including antikickback and false claims laws, the Medicaid Rebate Statute, the Veterans Health 

Care Act and individual state laws relating to pricing and sales and marketing 

practices. Violations of these laws may be punishable by criminal and/or civil 

sanctions, including, in some instances, substantial fines, imprisonment and 

exclusion from participation in federal and state health care programs, including 

Medicare, Medicaid, and Veterans Administration health programs. These laws and 

regulations are broad in scope and they are subject to evolving interpretations, which 

could require Abbott to incur substantial costs associated with compliance or to alter 

one or more of its sales or marketing practices. In addition, violations of these laws, 

or allegations of such violations, could disrupt Abbott’s business and result in a 

material adverse effect on Abbott’s revenues, profitability and financial condition. 

121. These quotations are merely a sampling. Many other contemporaneous statements by 

Abbott confirm that the prohibition on off-label marketing was known to be a fundamental aspect of 

Abbott’s business. 

3. Each Defendant Was Also Put On Notice of the Prohibition on Off-Label 

Marketing By a Long History of Government Investigations and Warnings 

Concerning Abbott’s Marketing Practices 

122. Each Defendant was on notice that off-label marketing was illegal because Abbott has 

repeatedly been penalized, warned or reprimanded about its illegal marketing behavior. 

123. In 2001, TAP Pharmaceutical Products Inc. (“TAP”), an Abbott joint venture with 

Takeda Pharmaceutical Company, entered into an agreement with the United States Department of 

Justice to settle an investigation involving TAP's illegal marketing of its prostate cancer drug, 

Lupron. In the settlement of civil and criminal liability for violating the Prescription Drug 

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Marketing Act, the False Claims Act and for filing false and fraudulent claims with fifty states and 

the District of Columbia, TAP agreed to pay $885 million. 

124. Following the identical prosecution pattern as the current case of illegal marketing of 

Depakote, the government’s investigation into illegal marketing of Lupron began with whistleblower 

lawsuits initiated by several TAP employees. The unlawful conduct included some of the very same 

conduct charged in the Spetter, McCoyd, and Dietzler qui tam actions regarding Depakote, such as 

offering to give things of value, including free drugs, so-called educational grants, trips to resorts, 

free consulting services, medical equipment, and forgiveness of debt, to physicians and other 

customers to obtain their referrals of prescriptions for Lupron to Medicare program beneficiaries, in 

violation of the anti-kickback statute. Following the $885 million fine, the U.S. Attorney in 

Massachusetts indicted and tried eight executives of TAP on charges of conspiracy to pay bribes and 

kickbacks to doctors and hospitals. Although the executives were acquitted after a three-month jury 

trial in 2004, U.S. Attorney Michael J. Sullivan released a statement following trial stating the 

government “remains committed to the aggressive investigation and prosecution of criminal conduct 

by corporations and individuals in the healthcare industry.” BOSTON GLOBE, July 15, 2004. 

125. On August 23, 2001, the Chicago Tribune reported that another division of Abbott, 

the Ross Products Division, was being investigated for a similar but different kickback scheme 

(“Ross Investigation”). At issue, according to the Chicago Tribune, was whether the medical product 

manufacturers engaged in a kickback scheme to encourage hospitals, nursing homes or home-care 

providers to buy pumps and related supplies used to feed seriously ill people by giving the products 

away or selling them at a discount. Some providers then allegedly billed the products at a higher 

price to either Medicare, the federal health insurance program for the elderly, or Medicaid, the 

federal-state health insurer for the poor. 

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126. On July 23, 2003, Abbott settled the Ross Investigation, incurring charges of 

approximately $622 million. As part of the settlement, C.G. Nutritionals, a division of Ross, pled 

guilty to a federal charge of Obstruction of a Criminal Investigation of Health Care Offenses, which 

was entered on October 27, 2003. 

127. The settlement also obligated Abbott to enter into a comprehensive Corporate 

Integrity Agreement (“CIA”) with the Office of Inspector General of the U.S. Department of Health 

and Human Services that, among other things, required Abbott to reform its sales and marketing 

practices. The October 9, 2003 Abbott CIA bound the current and future Abbott Directors to its 

terms. The CIA was in effect until October 2008, and so bound each of the Director Defendants and 

each of the former director Defendants. 

128. The requirements of the CIA further heightened Defendants’ awareness of the need to 

prevent off-label marketing. The CIA required Abbott to revise its Code of Conduct to make 

unmistakably clear the Director Defendants and Abbott had to comply with the requirements of the 

FDCA, the FDA, Medicaid, Medicare and other applicable statutes and of the key role of the Board 

of Directors in ensuring compliance with these laws by Abbott employees: 

Principle 8: Compliance With Laws 

We are required to familiarize ourselves with all the laws, rules and regulations that 

apply in the areas within the scope of our work responsibilities, including, as 

applicable, the following areas. Contact the Legal Division for advice in any area 

where you have questions. 

Food and Drug Laws 

We will comply with all laws, rules, and regulations applicable to our work 

responsibilities in every country in which Abbott does business. 

We must comply with all applicable laws, rules, regulations, consent decrees and 

other orders of the United States Food and Drug Administration and any other 

similar governmental authorities in other countries where Abbott does business 

governing research, development, manufacture, distribution and promotion of foods, 

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drugs, medical devices, diagnostic products, nutritional products or biological 

products... 

* * * 

Laws Relating to Government Health Care Programs 

We must comply with the laws relating to government health care programs in each 

country where Abbott does business. 

In the United States, its territories and possessions, and Puerto Rico, many Abbott 

products are reimbursed or purchased by Federal Health Care Programs – programs 

that include Medicare, Medicaid, Department of Defense and Department of 

Veterans Affairs health care programs, and many other Federal or Federally-funded 

programs that pay for health care items and services. These programs are regulated 

through a variety of laws affecting the coverage and reimbursement of Abbott 

products, as well as the sale and marketing of those products. 

Abbott is committed to full compliance with all Federal Health Care Program 

requirements, including the following: 

Federal Anti-kickback Statute 

The laws that regulate these programs include the Federal antikickback statute, which applies both to our sales and marketing 

activities and to a broad range of other activities, including grants, 

research contracts, and consulting agreements. It generally prohibits 

offering or paying (or soliciting or receiving) cash or other benefits to 

induce the purchase, order, or recommendation of products eligible 

for payment by a Federal Health Care Program. . . 

False Claims Laws 

The civil False Claims Act and other statutes prohibit knowingly or 

recklessly submitting false claims to the Government, or causing 

others to submit false claims. Accordingly, we must exercise care to 

ensure that we do not submit any inaccurate or otherwise improper 

claims for payment to the Government, or cause others to do so. 

Abbott contracts with Government customers and must avoid 

submitting any claims for payments not properly due. While Abbott 

does not itself submit claims to insurance programs like Medicare and 

Medicaid, many of our customers do. We must avoid any conduct 

that could lead customers to submit false claims by following 

procedures carefully designed to ensure that any information we 

provide to customers about Medicare or Medicaid reimbursement for 

our products is accurate and otherwise proper. 

* * * 

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Civil Monetary Penalties Law 

This law authorizes the imposition of civil monetary penalties for a 

variety of conduct. . . . Failure to adhere to Federal Health Care 

Program requirements, or to related Abbott standards, policies and 

procedures, can have a number of serious consequences, both for 

Abbott and for the individuals involved. . . . [V]iolation of these laws 

may result in exclusion of Abbott or individual employees from 

participation in Federal Health Care Programs... (emphasis added). 

129. Under the CIA, all of the Director Defendants were required to certify in writing that 

they had “received, read, understood” this Code of Conduct and would “abide” by them. Further, 

the CIA mandated that the Director Defendants receive “reasonable and appropriate general 

training” concerning the “requirements of the CIA” and Abbott’s compliance program, including 

the mandate that Abbott and the Director Defendants comply with Federal health care program 

requirements and the laws applicable to reimbursements made through Federal health care programs, 

including the False Claims Act. 

130.

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131. Further, over the past fourteen years, Abbott has received no fewer than fourteen

letters from the FDA concerning off-label promotion of many different drugs, including letters in 

1998 and 2009 concerning the off-label marketing of Depakote products. On July 26, 1998 then 

CEO Duane Burnham was warned that Abbott had distributed materials falsely promoting Depacon 

Injection for the treatment of “status epilepticus” - a serious medical emergency where a patient 

suffers prolonged, or a cluster of almost non-stop seizures. Moreover, the illegal marketing was a 

systemic marketing practice. It involved regional and district managers providing misleading 

articles to Abbott sales representatives for dissemination to physicians touting Depacon’s 

effectiveness in treating status epilepticus. Indicating an even more fundamental failure of internal 

control over compliant marketing processes, nobody at Abbott had submitted the misleading 

marketing material to the FDA for approval in accordance with the post-marketing reporting 

requirements for labeling and advertising. 21 C.F.R. §314.81(b)(3)(i). 

132. The fourteen letters dated from 1997 to 2009 from the Division of Drug Marketing, 

Advertising and Communications of the FDA were received by Abbott executives at Abbott 

headquarters and reported systemic off-label marketing of various products such as Kaletra, 

HUMIRA injections, Ultane, Hydra, Hytrin, Zyflo, Biaxin, Mivacron, Norvir, Survanta and 

Depakote ER. Despite the enhanced responsibilities of the Board of Directors set forth in the 2003 

Corporate Integrity Agreement, the systemic off-label marketing continued by Abbott executives, the 

warnings continued to be made by the FDA, and the Individual Defendants continued to consciously 

disregard the unlawful conduct and warnings. The FDA letters include the following: 

a) Letter dated March 17, 1997 from the Regulatory Review Officer, Division of Drug 

Marketing, Advertising and Communications of the FDA to Abbott executive David T. Guzek, 

Director, Regulatory Administration, Hospital Products Division at Abbott headquarters warning 

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Abbott to immediately discontinue its advertisement placed in a nationwide publication entitled 

Anesthesiology for the drug Ultane, because the advertisement promoted was not approved for the 

product; 

b) Letter dated May 6, 1997 from the Regulatory Review Officer, Division of Drug 

Marketing, Advertising and Communications of the FDA to Abbott executive Jill Lynch, Regulatory 

Affairs Specialist at Abbott headquarters informing her that materials in a journal advertising the 

“use and efficacy” of the product Hydra were false and must be immediately discontinued; 

c) Letter dated June 10, 1997 from the Regulatory Review Officer, Division of Drug 

Marketing, Advertising and Communications of the FDA to Abbott executive Jill Lynch, Regulatory 

Affairs Specialist at Abbott headquarters, warning Abbott to immediately discontinue a misleading 

advertisement for its drug Hytrin (terazosin); 

d) Letter dated June 27, 1997 from the Regulatory Review Officer, Division of Drug 

Marketing, Advertising and Communications of the FDA to Abbott executive Michael Sliwoski, 

PPD Regulatory Affairs, Advertising at Abbott headquarters concerning Abbott’s alleged promotion 

misstating the efficacy of the drug Zyflo that was being disseminated by sales representatives across 

the country and was included in sample packages of Zyflo given to health care professionals; 

e) Letter dated August 15, 1997 from the Regulatory Review Officer, Division of Drug 

Marketing, Advertising and Communications of the FDA to Abbott executive Barbara Hagins, 

Regulatory Affairs Specialist, Advertising, at Abbott headquarters, warning that promotional 

materials for the drug Biaxin were misleading because they failed to present adequate risk 

information, and ordering Abbott to immediately discontinue such ads; 

f) Letter dated September 18, 1998 from the Regulatory Review Officer, Division of 

Drug Marketing, Advertising and Communications of the FDA to Abbott executive Ann Karen 

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Henry, Director, Regulatory Affairs, Advertising at Abbott headquarters, warning Abbott to 

immediately discontinue its false promotion of Biaxin in posters, leaflets and on Abbott’s home 

page; 

g) Letter dated January 18, 2001 from the Regulatory Review Officer, Division of Drug 

Marketing, Advertising and Communications of the FDA to Abbott executive Thomas Willer, 

Associate Director, Regulatory Affairs at the Hospital Products Division of Abbott Labs, warning 

that Abbott’s professional sales aid of the drug Mivacron misleadingly claims there is no competitive 

drug with similar efficacy -- a false statement -- and neglecting to accurately state the risks of 

Mivacron; 

h) Warning Letter dated June 10, 2004 to Miles D. White, from the Director of the 

Division of Drug Marketing, Advertising, and Communications regarding misleading brochures, 

comparison chart and promotional website all disseminated to a nationwide audience falsely 

promoting the HIV drug Norvir. The letter warned Abbott’s Chairman and CEO that Abbott had 

failed to submit some of the promotional materials to the FDA as required by regulation, and that 

Abbott must cease the unlawful promotion and submit a plan with corrective actions; 

i) Letter dated July 15, 2005 from the Regulatory Review Officer, Division of Drug 

Marketing, Advertising and Communications of the FDA to Abbott executive Elizabeth M. Zola, 

Associate Director, Regulatory Affairs at Abbott headquarters, warning that a direct mailer sent to 

physicians nationwide promoting the drug Survanta overstates the efficacy and minimizes risks of 

developmental disabilities in infants who receive Survanta; 

j) Letter dated October 29, 2004 from the Consumer Promotion Analyst, Division of 

Drug Marketing, Advertising, and Communications to Abbott executive Greg Murawski, Manager, 

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Regulatory Affairs, regarding false advertising of Kaletra in nationwide direct-to-consumer ads 

(misleading impression concerning the effectiveness of the drug, and lack of risk information); 

k) Letter dated December 16, 2008 from the Regulatory Review Officer, Division of 

Drug Marketing, Advertising and Communications of the FDA to Abbott executive Mary Ann 

Huizenga, Regulatory Affairs Manager, at Abbott headquarters, requiring immediate cessation of 

nationwide ad for the drug Humira in the American Academy of Dermatology for falsely broadening 

the indications of the drug beyond the FDA’s approval; 

l) A July 14, 2009 Warning Letter from the FDA to Miles D. White, Chairman of the 

Board & Chief Executive Officer, warning Abbott to immediately cease and desist from making 

false claims about the efficacy and safety risks of the drug Kaletra, an HIV drug, directly to 

consumers; the letter states: 

DDMAC has expressed concerns regarding Abbott’s promotion of 

Kaletra in an earlier letter. . . . We are concerned that you are 

continuing to promote your product in a similarly violative manner. 

133. It is public knowledge that on January 22, 2009, the Department of Health and 

Human Services sent Rick Leber a warning that Abbott was using “flashcards” that impermissibly 

broadened the indication for Depakote ER. According to the letter, the flashcards misleadingly 

suggested that Depakote ER had a broader indication for treatment of mania than Depakote. The 

flashcards also omitted material information concerning Depakote ER in order to create the 

impression that Depakote ER would provide patients with some clinical benefit. Accordingly, this 

promotional material violated the FDCA. This misleading material was apparently part of a strategy 

to fight generic competition by converting Depakote users to Depakote ER. While Abbott lost its 

patent for Depakote in mid-2008, it was able to maintain some patent protection for Depakote ER 

until early-2009. 

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134.

 

135. In 2010, Abbott settled two additional cases involving the Company’s illegal 

marketing and sales practices. The first, which arose out of a whistleblower complaint filed by Vena-Care of southern Florida in 2007, involved allegations of marketing the “spread” for certain Abbott 

drugs and violating the False Claims Act with respect to the Company’s grossly inflated pricing of 

one of its antibiotics and some of its generic, water-based solutions primarily used to facilitate the 

intravenous infusion or injection of other drugs. Specifically, it was alleged that Abbott intentionally 

reported inflated prices, often in excess of 1000% higher than Abbott’s actual prices, in order to 

attain higher levels of customer reimbursement and profit from Medicare and Medicaid. In 

conjunction with this settlement, Abbott agreed to pay $126.5 million to resolve the claims. 

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136. The second case Abbott settled in 2010 involved the payment of $41 million to 

resolve criminal and civil liability arising from the illegal marketing of drugs Advicor and Niaspan 

by the Company’s subsidiary Kos Pharmaceuticals (“Kos”). In that case, “The United States 

contend[ed] that Kos promoted the sale and use of Advicor for use as first-line therapy for 

management of mixed dyslipidemias... Such an off-label use was not approved by the Food and 

Drug Administration nor was it a medically-acceptable indication for which the United States and 

state Medicaid programs provided coverage for Advicor.” It was further alleged that Kos offered and 

paid doctors, other medical professionals, physician groups and managed care organizations, illegal 

kickbacks in the form of money, free travel, grants, honoraria and other valuable goods and services, 

in violation of the Anti-Kickback Statute to get them to prescribe or recommend Niaspan and 

Advicor. The unlawful marketing conduct by Kos, broadening the indications for use of the product 

beyond FDA approval and bribing health care professionals in exchange for writing prescriptions is 

identical to the conduct the Company engaged in to unlawfully drive up sales of Depakote. 

137. The foregoing show that Abbott’s practice of off-label marketing of its various 

products continues to this day despite over a decade of warning letters, consent decrees, hundreds of 

millions of dollars in fines, and criminal prosecution. This pattern of law breaking indicates a 

compelling need for implementation of the enhanced internal controls demanded by this Plaintiff in 

its request for relief. 

4. 

 

138. It is the Director Defendants’ job to learn about the major aspects of Abbott’s 

operations and ensure that those operations fully comply with the law. Abbott’s Corporate 

Governance policy defines the Board’s responsibility as follows: 

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“The board of directors shall review and, where appropriate, approve fundamental 

operating, financial, risk management, and other corporate strategies, as well as other 

major plans and objectives and shall monitor the effectiveness of management 

policies and decisions, including the execution of strategies.” 

 

Further, 

 “Directors shall comply with all laws, rules and regulations applicable to their 

capacity as directors of Abbott.” 

139. Further, as described above, the Director Defendants knew that they were obligated 

under the terms of the CIA to ensure that they and Abbott complied with the FDCA, FDA, Medicaid, 

Medicare and other applicable statutes. Indeed, in addition to acknowledging in writing that they 

would follow these laws as required by the CIA and Abbott’s Business Code, 

 

140.

141.

 

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142.

 

143.

 

144.

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145.

 

146.

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147.

 

148.

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149.

 

150.

 

151.

152.

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153.

 

154. 

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155.

 

D. The Government Investigation 

156.

 Nevertheless, neither the 10-Q issued on May 5, 2009 nor the one issued on 

August 7, 2009 made any mention of the DOJ’s pending investigation. 

157. On November 6, 2009, Abbott, for the first time, reported in its Form 10-Q that the 

Department of Justice had begun an investigation into Abbott’s sales and marketing activities for 

Depakote. According to the disclosure, “the government is seeking to determine whether any of 

these activities violated civil and/or criminal laws, including the Federal False Claims Act, the Food 

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and Drug Cosmetic Act, and the Anti-Kickback Statute in connection with Medicare and/or 

Medicaid reimbursement to third parties.” Abbott continued using this same disclosure in each of the 

next two annual reports it filed with the SEC. 

158. In its March 2010 proxy, Abbott disclosed that it had advanced defense costs on 

behalf of three former officers in connection with the government investigation. In its March 2011 

proxy, Abbott disclosed that the government investigation had expanded such that the Company had 

advanced defense costs on behalf of two current and five former officers. 

159. Among other things, the Government sought all e-mails sent or received by thirteen 

individuals from 1996 through 2008 as part of its investigation into potential federal violations 

arising out of Abbott’s impermissible off-label marketing of Depakote as a treatment for agitation 

and aggression in the elderly, and health care fraud arising out of that allegedly improper use. 

Eventually, the Government had to move to compel Abbott to produce the e-mails of three people 

(Defendants Dempsey, White, and Leiden), which the court granted. The emails related to Depakote 

and off-label marketing of other FDA approved drugs. 

160. On February 4, 2011, the DOJ elected to intervene in a whistleblower lawsuit filed in 

late 2008 by former Abbott sales representatives and unsealed a redacted version of its Complaint 

against Abbott involving the Company’s illegal scheme to promote Depakote. 

161. On October 19, 2011, Abbott, for the first time, announced that it would record a 

charge of $1.5 billion to cover a potential settlement with the federal government and twenty-four 

states. It was reported that Abbott had agreed to pay $800 million to resolve civil claims over 

Depakote and $500 million in criminal penalties, which would make the settlement one of the largest 

in history for off-label marketing. This settlement has not been finalized. Further, it is not known 

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what, if any, other conditions will be attached to the settlement and whether the federal government 

or any states will seek to hold any of Defendants civilly or criminally liable for their actions. 

DEMAND IS FUTILE

162. Plaintiff brings this action derivatively in the right and for the benefit of Abbott to 

redress the Individual Defendants’ breaches of fiduciary duties and violations of law as alleged 

herein, and to require that the Company undertake corporate governance reforms to prevent similar 

harm to the Company in the future. 

163. Plaintiff is an institutional shareholder, fully understands and is prepared to meet its 

Rule 23.1, Federal Rule of Civil Procedure obligations to adequately and fairly represent the 

interests of the Company and its shareholders in enforcing and prosecuting its rights. 

164. Plaintiff has not made any demand on the Board to institute this action against the 

Individual Defendants. Such demand would be a futile and useless act because a majority of the 

Board is incapable of making an independent and disinterested decision to institute and vigorously 

prosecute this action. 

165. Plaintiff incorporates by reference all preceding paragraphs as though they were fully 

set forth herein. 

166. Demand is futile because the decision to allow Abbott employees to engage in offlabel marketing of Depakote was not in good faith and is not protected by the business judgment 

rule. 

167. Demand is futile because each of the eight Director Defendants, White, Fuller, 

Austin, Farrell, Scott, Tilton, Osborn, and Alpern, face a substantial likelihood of liability for 

consciously allowing Abbott to engage in off-label marketing of Depakote. 

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168.

 

169.

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170. Demand is excused because the Director Defendants face a substantial likelihood of 

liability under the FCA. The FCA imposes liability on “[a]ny person” who, inter alia, “knowingly 

presents, or causes to be presented, to an officer or employee of the United States Government . . . a 

false or fraudulent claim for payment or approval.” Because the Director Defendants knew that 

Abbott’s employees were engaging in off-label marketing that induced government healthcare 

programs to pay for Depakote prescriptions that were not medically justified, they may be subject to 

liability for “causing” false claims to be submitted to the U.S. Government. Each violation of the 

FCA subjects the violator to a civil penalty of not less than $5,500 and not more than $11,000 for 

each violation. In addition, a violator is liable for three times the amount of all damages sustained 

by the U.S. Government. Thus, the Director Defendants have a strong economic incentive to prevent 

the further investigation and exposure of their role in causing Abbott to violate the FCA. Indeed, 

the complaint in the U.S. ex. rel Spetter, which alleges off-label marketing between January 1, 1998 

and January 1, 2009 and FCA claims arising out of the same conduct, names as defendants John 

Does 1-100, the co-conspirators for the wrongdoing alleged therein. 

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171. Demand is futile because each Director Defendant faces a substantial likelihood of 

liability for the breach of fiduciary duty claims alleged in this complaint against them. It is beyond 

dispute that directors of a company cannot operate the company they control in an illegal manner, 

even if they believe that doing so will benefit the company financially in the short term. The 

Director Defendants were aware of the fact that Abbott was engaged in off-label marketing, but 

allowed the off-label marketing to continue. This is a clear breach of their fiduciary duty. 

COUNT I 

Derivative Claim Against All 

Defendants for Breach of Fiduciary Duty

172. Plaintiff incorporates by reference and realleges each and every allegation set forth 

above, as though fully set forth herein. 

173. Defendants knowingly, willfully and/or intentionally breached their duties of loyalty 

and good faith by knowingly concealing and/or allowing the concealment of material facts from 

Abbott shareholders. 

174. As officers and/or directors of a publicly held company, the Defendants had a duty to 

act in the best interest of the Company’s shareholders and to refrain from either knowingly or 

recklessly engaging in wrongful conduct themselves, or financially rewarding others for falsifying 

Company records and other misconduct. In addition, at all times, the Defendants had a duty to 

promptly disseminate accurate and truthful information with respect to Abbott’s operations and 

affairs. The Defendants instead concealed their wrongdoing and, as a result thereof, disseminated 

false and misleading statements and reports about Abbott. 

175. The Defendants, in their roles as executives and directors of Abbott, participated in 

the acts of mismanagement alleged herein, and knowingly, willfully, and/or intentionally disregarded 

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adverse facts known to them, and did nothing to reveal them. They thereby breached their fiduciary 

duties of care, loyalty, accountability and disclosure to Abbott and its shareholders. 

176. The Defendants each further owed a fiduciary duty to Abbott and to Abbott’s 

stockholders to seek redress from those whose conduct has caused and will cause the Company to 

expend its assets and whose conduct has otherwise precipitated the potentially illegal activities 

alleged herein. The Defendants have not done so. 

177. All Defendants breached and/or aided and abetted these breaches of fiduciary duties 

owed to Abbott and its shareholders. 

178. The conduct outlined herein was not due to an honest error of judgment, but rather 

was due to the Defendants’ bad faith and was done knowingly, willfully and/or intentionally, and 

resulted in losses to Baxter and its shareholders. 

PRAYER FOR RELIEF

WHEREFORE, Plaintiff, on behalf of Abbott, demands judgment as follows: 

A. Declaring that the Defendants, and each of them, have committed breaches of their 

fiduciary duties to Abbott, abused their control, grossly mismanaged Abbott, and committed the 

potentially illegal and clearly improper actions complained of herein; 

B. Requiring the Defendants to pay Abbott the amounts by which the Company has been 

damaged by reason of the conduct complained of herein and to indemnify Abbott for any claims 

brought against Abbott by any of its officers, directors, employees, or by any third party; 

C. Entering equitable and/or injunctive relief as permitted by law, including disgorging, 

attaching, impounding, imposing a constructive trust on or otherwise restricting the value of the 

proceeds of Defendants’ other assets so as to assure that Plaintiff on behalf of Abbott has an 

effective remedy; 

D. Directing Abbott to take all necessary actions to reform and improve its corporate 

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governance and undertake all reasonable corporate governance reforms necessary to ensure that the 

wrongdoing alleged in this Complaint does not recur. 

E. Ordering that the Defendants personally bear their own legal fees in defending any 

and all claims arising out of these matters, whether asserted by stockholders or the government, and 

not be indemnified by the corporation or any insurance; 

F. Awarding punitive damages; 

G. Awarding Plaintiff the costs and disbursements of this action, including reasonable 

attorneys’ and experts’ fees; 

H. Granting extraordinary equitable and/or injunctive relief as permitted by law, equity, 

and state statutory provision sued hereunder, including enjoining Defendants, their agents, counsel, 

employees and all persons acting in concert with them from further enriching themselves at the 

expense of the Company; and 

I. Granting such other and further relief as this Court may deem just and proper. 

JURY DEMAND

Plaintiff demands a trial by jury. 

Dated: April 10, 2012 FREED KANNER LONDON & MILLEN LLC 

/s/ Michael J. Freed 

Michael J. Freed 

2201 Waukegan Road, Suite 130 

Bannockburn, IL 60015 

Telephone: (224) 632-4500 

Facsimile: (224) 632-4521 

Email: mfreed@fklmlaw.com 

 

Judith S. Scolnick 

Thomas L. Laughlin, IV 

Donald A. Broggi 

SCOTT+SCOTT LLP 

500 Fifth Avenue, 40th Floor 

New York, NY 10110 

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68

Telephone: (212) 223-6444 

Facsimile: (212) 223-6334 

Email: jscolnick@scott-scott.com 

 tlaughlin@scott-scott.com 

 dbroggi@scott-scott.com 

Counsel for Pipefitters Local Union No. 

120 Pension Fund 

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