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Bristol Myers Squibb to Pay $515 Million for Kickbacks, Off-Label Marketing and Price Fixing Schemes

Oct 1, 2007 | Parker Waichman Alonso LLP

Bristol Myers Squibb and its affiliate Apothecon, Inc. paid kickbacks to physicians for prescribing the company’s drugs and illegally promoted the off-label use of the anti-psychotic drug Abilify.  Now, Bristol Myers Squibb has agreed to pay more than $500,000 to settle a civil suit that stemmed from those and other illegal practices.

The settlement was announced by the US Attorneys Office in Massachusetts.  Under the terms of the settlement, Bristol Myers Squibb will pay the pay the government $515 million.  The company also agreed to provide records of kickbacks given to physicians and will take steps to prevent further fraudulent activities.   As a result of the settlement, the US Attorney will not be pursuing criminal charges against Bristol Myers Squibb.

The settlement came after several Bristol Myers Squibb employees went public about illegalities in the company’s marketing programs.   Federal law allows people with knowledge of fraud to file lawsuits against companies on behalf of the government.   Six Bristol Myers Squibb whistleblowers brought suit against Bristol Myers Squibb in Massachusetts and Florida. By law, these individuals will share about $50 million of the settlement.   .

Among the whistleblowers’ allegations was that Bristol Myers Squibb rewarded physicians for prescribing the company’s drugs.   According to the settlement agreement, Bristol Myers Squibb paid such kickbacks to physicians and healthcare providers from 2000 through mid-2003.  The kickbacks came in several forms, including consulting fees and trips to luxury resorts.

The settlement agreement also says that Bristol Myers Squibb actively promoted off-label use of the anti-psychotic drug Abilify.   Abilify was approved by the Food & Drug Administration to treat schizophrenia and bipolar disorder in adults.  And the drug carries a “black box” warning concerning use for treatment of dementia-related psychosis. But between 2002 and 2005, Bristol Myers Squibb maintained a sales force that specifically marketed the drug to nursing homes and long-term care facilities.  What’s worse, sales representatives also visited pediatric psychiatrists and urged them to prescribed Abilify to children.

The settlement agreement also says Bristol Myers Squibb engaged in illegal price fixing schemes by inflating prices for many cancer-fighting and generic drugs.   The aim of these schemes was to deceive federal healthcare programs that established reimbursement rates based on those prices.

On its website, Bristol Myers Squibb said that 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."  The company said it had entered into a 5 year “corporate integrity agreement” with the federal government to insure compliance with the law.   Bristol Myers Squibb also said it would be retraining its sales force so that sales representatives understand federal drug laws – especially those regarding off-label marketing of medications.