Bristol-Myers agrees to huge settlement to resolve whistle-blower suit

September 25, 2008  |  Press Releases

Bristol-Myers Squibb Company (BMS) and its wholly owned subsidiary, Apothecon, Inc., are close to paying out a huge amount of money to settle charges by a number of states and the federal government concerning the company’s drug marketing and pricing practices. As part of the settlement, Bristol Myers also submitted to the terms of a Corporate Integrity Agreement with the Office of Inspector General of the Department of Health and Human Services, requiring the drug maker to report accurately concerning its drugs covered by Medicare and other federal health care programs. The settlement was reached months ago in a case involving several illegal marketing and pricing practices.

The suit alleged that, to induce doctors and other health care providers to purchase the company’s drugs, the drug manufacturer made payment to the providers in the form of consulting fees and expenses and travel to luxurious resorts. Potential pharmacy and wholesaler customers received stocking allowances, price protection payments, and free goods. The company was also alleged to have promoted actively the sale and use of Abilify, an antipsychotic drug, for pediatric use and to treat dementia-related psychosis, despite the fact that the Food and Drug Administration has not approved Abilify for such uses and has even required that the product’s packaging warn against use in the treatment of dementia-related psychosis. Further, the drug maker set fraudulent and inflated prices for a number of oncology and generic drug products, causing fraudulent claims for reimbursement to be submitted to federal health care programs in connection with those drugs. Finally, the suit claimed that the company failed to report the low prices at which it sold its anti-depression drug, Serzone, to Kaiser, a large commercial purchaser, thereby denying the Medicaid program the benefit of the government’s “lowest price in the marketplace” guaranty.

This settlement covers claims made in seven separate qui tam actions filed under the False Claims Act. The Act allows for private persons to file a qui tam (or whistleblower ) suit on behalf of the government. Where, as here, the government prevails in its case, the whistleblower is entitled to a share of the recovery. The whistleblowers in this case will receive a sizeable amount as their share of the settlement.

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