Bristol-Myers Squibb: Illegal Activities

Illegal Drug Marketing and Pricing

In September 2007 the United States Department of Justice announced that Bristol-Myers Squibb Company (BMS) and its wholly owned subsidiary, Apothecon, Inc., have agreed to pay over $515 million to resolve a broad array of civil allegations involving their drug marketing and pricing practices

BMS is accused of fraudulently inflating the cost of their drugs, illegally providing renumeration to physicians and other health care providers to induce them to purchase BMS drugs, and pushing for the use of their drugs for 'off label' purposes. 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.

The Department of Justice reports how BMS stands accused of a wide assortment of illegal marketing and pricing practices under the False Claims Act...

Illegal remuneration

• ’from approximately 2000 through mid-2003, BMS knowingly and willfully paid illegal remuneration to physicians and other health care providers to induce them to purchase BMS drugs. BMS paid the illegal remuneration in the form of consulting fees and expenses to physicians and other health care providers to participate in various consulting programs, advisory boards, and preceptorships. Some of these programs involved travel to luxurious resorts. The Government also alleged that, from 1994 through 2001, Apothecon knowingly and willfully paid illegal remuneration such as stocking allowances, price protection payments, prebates, market share payments, and free goods in order to induce its retail pharmacy and wholesaler customers to purchase its products. In both cases, the Government alleged that, by paying this illegal remuneration to physicians and others, BMS and Apothecon knowingly caused the submission of false and fraudulent claims to the federal health care programs’.

Pushing for 'off-label' uses

• 'from 2002 through the end of 2005, BMS knowingly promoted the sale and use of Abilify, an atypical antipsychotic drug, for pediatric use and to treat dementia-related psychosis, both “off-label” uses. The Food and Drug Administration has approved Abilify to treat adult schizophrenia and bi-polar disorder, but has not approved the use of Abilify for children and adolescents or for geriatric patients suffering from dementia-related psychosis. Indeed, the FDA has mandated that the package for Abilify carry a “black box” warning concerning its use in the treatment of dementia-related psychosis. Nonetheless, BMS directed its sales force to call on child psychiatrists and other pediatric specialists, and the sales force then urged physicians and others providers to prescribe Abilify for pediatric patients. BMS also created a specialized long term care sales force that called almost exclusively on nursing homes, where dementia-related psychosis is far more prevalent than schizophrenia or bipolar disorder'.

Fraudulently inflated prices

• ’BMS and Apothecon set and maintained fraudulent and inflated prices for a wide assortment of oncology and generic drug products with the knowledge that federal health care programs established reimbursement rates based on those prices. By reporting false and fraudulent prices that were substantially higher than commonly and widely available prices in the marketplace, BMS and Apothecon created a “spread” between the reimbursement rates for federal health care providers and the actual prices for the drugs charged to its customers. The larger the spread on a drug, the larger the profit or return on investment for the provider. Because reimbursement from federal programs was based on the fraudulent, inflated prices, the United States alleged that BMS and Apothecon caused false and fraudulent claims to be submitted to federal health care programs’.

• ’BMS knowingly misreported its best price for the anti-depression drug, Serzone. Under the provisions of the Medicaid Drug Rebate Statute, BMS was required to report to Medicaid the lowest, or "best" price, for Serzone that it charged its commercial customers. In making its mandatory best price reports, BMS knowingly failed to include the low prices at which it sold "private-label" Serzone to Kaiser, a large commercial purchaser. As a result, BMS denied the Medicaid program and certain Public Health Service entities the benefit of the lowest price in the marketplace’.

The investigation was conducted by a variety of agencies including the Federal Bureau of Investigation (FBI) who’s former Director (Louis J Freeh ) now sits on the Board of Directors for BMS.