BRISTOL-MYERS SQUIBB SETTLES FOR $389 MILLION TO RESOLVE MEDICAID PHARMACEUTICAL PRICING AND MARKETING ALLEGATIONS

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July 18, 2008

BRISTOL-MYERS SQUIBB SETTLES FOR $389 MILLION TO RESOLVE MEDICAID PHARMACEUTICAL PRICING AND MARKETING ALLEGATIONS

Arkansas to Receive $1.3 Million

LITTLE ROCK-Today, Attorney General Dustin McDaniel announced the State of Arkansas's settlement with Bristol-Myers Squibb company (BMS) and its former wholly owned subsidiary Apothecon, Inc. that will return $1.3 million to the Arkansas Medicaid program. The Attorney General participated in a multi-state effort led by the National Association of Medicaid Fraud Control Units that included 43 other states, the District of Columbia, and the federal government.

 

Specifically, the global settlement with BMS resolves allegations of illegal drug marketing and pricing of prescription medications paid by the participating states' Medicaid programs totaling $389 million plus interest. The federal portion of the settlement was concluded last fall. The State of Arkansas's share is $1.3 million. The settlement addresses allegations that BMS engaged in a number of improper marketing and pricing practices, including:

 

-Reporting inflated prices for various prescription drugs knowing that Medicaid and various federal health care programs would use these reported prices to pay for BMS and Apothecon products used by their recipients;

 

-Paying illegal remuneration to physicians, health care providers, and pharmacies to induce them to purchase BMS and Apothecon products;

 

-Promoting the sale and use of Abilify, an antipsychotic drug, for pediatric use and for treatment of dementia-related psychosis, uses which the federal Food and Drug Administration has not approved; and

 

-Misreporting sales prices for Serzone, an antidepressant, resulting in the improper reduction of the amount of rebates paid to the state Medicaid programs.

 

The settlement reimburses the federal government and the participating states for excessive amounts paid by Medicaid programs as a result of this conduct. As part of the settlement, BMS has also entered into a Corporate Integrity Agreement with the Office of Inspector General of the U.S. Department of Health and Human Services, under which BMS will be required to report accurately its average sales prices and average manufacturers prices in the future.

 

"I am very pleased with the result of this investigation and thank those states that took the lead in the effort," said McDaniel. "While this is a good result and a step forward, there is no doubt that others have, and continue to be, engaged in similar conduct. Accordingly, I remain committed to investigating and redressing such behavior so as to ensure that Arkansans are being prescribed medication based on need, not on monetary favors, and to preserve the precious assets of our Medicaid program."