BMS to Pay Huge Fine for Marketing Practices

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 this month.

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 form.)

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.

The Department of Justice press release is posted at<www.usdoj.gov/opa/pr/2007/September/07_civ_782.html>. A BMS press release is posted at<newsroom.bms.com/index.php?s=press_releases&item=305>.▪