Bristol-Myers Squibb Settles for $389 Million to Resolve Medicaid Pharmaceutical Pricing and Marketing Allegations 

PIERRE, S.D.-    The National Association of Medicaid Fraud Control Units announced on July 15, 2008 that 43 states, the District of Columbia, and the federal government have settled with Bristol-Myers Squibb Company (BMS) and its former wholly owned subsidiary Apothecon, Inc., to resolve 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 South Dakota will receive over $700,000 of the settlement amount. 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-relating 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.

The South Dakota Medicaid Fraud Control Unit and the South Dakota Department of Social Services assisted in recovering the settlement money.

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