Bristol-Myers Squibb and its subsidiary Apothecon have agreed to pay more than $515m (£255m; €365m) in a settlement with the US Department of Justice and the Office of the United States Attorney for Massachusetts to resolve allegations involving their drug marketing and pricing practices.
The Department of Justice said in a press release that the “settlement covers a wide assortment of illegal marketing and pricing practices.”
The department said that from about 2000 to mid-2003 Bristol-Myers Squibb made illegal payments to doctors and other healthcare providers to induce them to purchase the company's drugs. The payments were made in the form of consulting fees and expenses to participate in consulting programmes, advisory boards, and preceptorships. Some programmes involved trips to luxury resorts.
From 1994 to 2001 Apothecon paid illegal remuneration to retail pharmacies and wholesalers to buy its drugs. The government alleged that in paying this illegal remuneration the company and its subsidiary submitted false and fraudulent claims to the US government healthcare programmes.
The government also said that from 2002 to 2005 Bristol-Myers Squibb promoted its atypical antipsychotic drug aripiprazole (sold as Abilify) for use in children and for treating dementia related psychoses. The drug is approved only for use in adult patients with schizophrenia or bipolar disorder. The company's sales representatives urged doctors and healthcare providers to prescribe the drug for off-label use in children and in adults with dementia related psychoses in nursing homes.
In addition, the government said that the company and its subsidiary set fraudulent and inflated prices for a number of cancer and generic drugs, knowing that government health programmes set reimbursement rates that were based on those prices.
Finally, the government said that Bristol-Myers Squibb misreported its best price for the antidepressant nefazodone (Serzone). The company was supposed to report to Medicaid, the government health insurance programme for poor people, the best price it charged its commercial customers. The result was that Medicaid did not get the best price.
The government said, “As part of [the] settlement, Bristol-Myers Squibb entered into a corporate integrity agreement with the Office of Inspector General of the Department of Health and Human Services that, among other things, requires the company to report accurate average sales prices and average manufacturer prices for its drugs covered by Medicare [the health insurance programme for elderly people] and other federal health care programmes.”
Bristol-Myers Squibb said it “is pleased to have resolved these matters from the past and is proud of its commitment to conduct business with the highest standards of integrity in its mission to extend and enhance human life.” It said that the agreement would not affect its ongoing business with any customers, including the government.