Bristol-Myers Squibb (BMS) and its subsidiary, Apothecon Inc., have agreed
to settle a number of civil cases with the federal government for a total of
$515 million, the U.S. Department of Justice announced in September.
The cases alleged that BMS and Apothecon engaged in illegal marketing and
pricing practices to promote the sales of BMS drugs as well as illegal
promotion of off-label use of aripiprazole (Abilify).
The civil settlement covers cases brought since 2005, in which the
government charged that BMS and Apothecon illegally gave kickbacks and
incentives to physicians and other health providers for purchasing BMS
products in the 1990s and early 2000s.
The "illegal remuneration," according to a press release from
the Department of Justice, included fees and expenses paid to physicians and
other health care providers through consulting arrangements, advisory boards,
and travel to luxurious resorts and in the forms of "prebates,"
market-share payments, and free goods. BMS and Apothecon inflated drug prices
and overcharged federal health care payers "for a wide assortment of
oncology and generic drug products" to give higher profit margins to the
care providers, the government claimed.
The government also charged that the sales force of BMS illegally promoted
its atypical antipsychotic drug Abilify for pediatric use and treatment of
dementia-related psychosis from 2002 through 2005. Abilify had not been
approved by the Food and Drug Administration for use in children until earlier
In addition, the government alleged that BMS falsely reported the lowest
price for its antidepressant drug nefazodone (Serzone) to Medicaid programs
and thus violated the Medicaid Drug Rebate Statute, which entitles state
Medicaid programs to the lowest drug prices set for commercial buyers. (BMS
stopped manufacturing Serzone in 2004; nefazodone remains available in generic
The civil settlement to resolve the charges among BMS, the Department of
Justice, and the U.S. Attorney's Office for the District of Massachusetts
amounted to $499 million plus $16 million in interest. As part of the
settlement, BMS admitted no wrongdoing, but entered into a corporate integrity
agreement with the Department of Health and Human Services to report its drug
prices accurately for Medicare and other federal programs.
There are no criminal charges against BMS, according to the company.