Bristol-Myers Squibb to Pay Half a Billion Dollars to Settle Doctor Kickback Charges and Avoid Prosecution

Thursday, January 03, 2008 by: David Gutierrez, staff writer
Tags: Bristol-Myers Squibb, drug companies, pharmaceutical fraud

(NewsTarget) The pharmaceutical company Apothecon and its parent, the Bristol-Myers Squibb Company, have agreed to a comprehensive settlement in a variety of federal and state lawsuits that accused the companies of myriad degrees of financial misconduct.

The settlement was announced by U.S. attorney Michael J. Sullivan, who also said that the government will not pursue criminal charges against the company. This will enable Bristol-Myers Squibb to avoid criminal sanctions or having its relationship with state and federal governments threatened.

Among the many allegations against the company, the federal government charged that Bristol-Myers Squibb paid out illegal gifts to doctors and health-care providers between 2000 in 2003 to encourage them to promote and prescribe the company's drugs. The company was also accused of artificial and fraudulent price inflation in order to defraud public health-care programs on prescription costs and of paying wholesalers and retailers to stock Bristol-Myers Squibb drugs. In addition, the government charged the company with illegally promoting the prescription of Abilify, an atypical antipsychotic, for non-approved, "off-label" use on children and dementia patients.

"Kickbacks are especially nefarious when they are used as part of a marketing effort to convince physicians to prescribe drugs for uses that the FDA has not determined to be safe and effective," Sullivan said.

As part of the settlement, Bristol-Myers Squibb will pay out $515 million to various plaintiffs. In addition, the company has agreed to a five-year "corporate integrity agreement" with the U.S. Department of Health and Human Services' Office of the Inspector General. Under this agreement, the company is required to maintain certain compliance programs for all its U.S. business dealings.

"This settlement allows Bristol-Myers to escape the repercussions of being convicted on criminal charges," explained Big Pharma critic Mike Adams. "It's business as usual in America today: Drug companies commit fraud, get caught, then settle without admitting any wrongdoing. The very next day, they're back at it, engaged in the same kind of kickback schemes and price fixing frauds. Drug companies have learned it pays to engage in fraud, because settlement fees are dwarfed by the profits reaped from their criminal behavior," Adams said.

Only three months ago, the company avoided going to trial on federal conspiracy charges by agreeing to certain probation conditions. In that unrelated case, federal prosecutors alleged that Bristol-Myers Squibb had exaggerated its revenue by $2 billion in order to induce wholesalers to buy more of its products than could actually be sold.