Monthly Archives: July 2008

State to get nearly $7 million in settlement with drug company


Seattle Times

Bristol-Myers Squibb has agreed to pay the Washington state nearly $7 million to settle allegations of illegal marketing and pricing of prescription medications.
By Susan Gilmore

Bristol-Myers Squibb has agreed to pay the Washington state nearly $7 million to settle allegations of illegal marketing and pricing of prescription medications.

Washington is one of 43 states involved in the $389 million settlement, which compensate state’s Medicaid programs, which were overcharged for prescription medications.
The settlement reimburses the federal government and states for excessive amounts paid by Medicaid contracts.

According to the state Attorney General’s office, the settlement stems from allegations that Bristol-Meyer, and its former subsidiary, Apothecon, engaged in several improper marketing and pricing practices, including:

• Reporting inflated prices for prescription drugs knowing that Medicaid and other federal health care programs would used these prices to pay for Bristol-Meyers products.

• Paying illegal fees to physicians and other health care providers and pharmacies to induce the purchase of Bristol Meyer products.

• Promoting the sale and use of Abilify, an antipsychotic drug for pediatric patients and for the treatment of dementia-related psychosis, for which uses the federal Food and Drug Administration had not approved.

• Misreporting the sale price for the antidepressant Serzone, resulting in the improper reduction of rebates paid to state Medicaid programs.

The settlement was the second major one with Bristol-Meyers Squibb in the past five years.

In 2003, the state was part of a $55 million national settlement reached in a lawsuit against Bristol-Meyers. It compensated Washington cancer patients who paid too much for chemotherapy drugs.

The antitrust suit alleged the drug manufacturer fraudently obtained patents on cancer drug Taxol that delayed the availability of lower-priced generic versions. As a result, thousands of cancer patients, including as many as 3,000 in Washington, were overcharged.

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Minnesota to get $4 million in Bristol-Myers Squibb settlement

Pioneer Press
By Jennifer Bjorhus

Pharmaceutical giant Bristol-Myers Squibb Co. is paying Minnesota $4.35 million to settle allegations of Medicaid fraud, the state Attorney General’s office announced Tuesday.

The Minnesota payment is part of a $515 million settlement the U.S. Department of Justice reached with New York-based Bristol-Myers last fall regarding Medicaid overpayments, the company said. Minnesota joined the settlement along with 42 other states.

The settlement resolved allegations that between the 1990s and 2005 Bristol-Myers and its former subsidiary Apothecon Inc. inflated prices for various prescription drugs covered by Medicaid, bribed doctors and health care providers to buy products and promoted using an antipsychotic drug called Abilify to treat children and dementia-related psychosis, which are uses the Food and Drug Administration hasn’t approved. The company was also accused of misreporting sales of an antidepressant called Serzone.

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Settlement restores money to Delaware Medicaid


The News Journal

The Delaware Department of Justice has recovered more than $1 million for the Delaware Medicaid program through a settlement with Bristol-Myers Squibb Company and its former subsidiary Apothecon, Inc., Attorney General Beau Biden announced Monday.

The settlement resolves allegations that BMS illegally marketed and priced prescription medication that cost states’ Medicaid programs. The national settlement, involving 43 states, the District of Columbia, and the federal government, totals $389 million plus interest.

Recovered for the Delaware Medicaid program was $1.1 million. Delaware has received $561,712, including restitution of $274,184 for the Delaware Medicaid program and a penalty of $287,528 that will be paid to the state’s general fund. The balance was returned to federal authorities.

BMS was accused of improper practices including reporting inflated prices for prescription drugs; illegally remunerating physicians, health care providers and pharmacies to induce them to purchase its products; promoting the sale and use of the antipsychotic drug Abilify for uses not approved of by the federal Food and Drug Administration; and misreporting sales prices for the antidepressant drug Serzone.

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Legislators want to get tough with drug manufacturers

Eagle Tribune
By Terry Date

Seventeen state representatives wrote New Hampshire Attorney General Kelly Ayotte in May, asking her to seek financial compensation from pharmaceutical companies that have improperly marketed or not fully disclosed side effects of antipsychotic drugs.

The petitioners didn’t know it at the time, but the attorney general’s office had been investigating one of those companies, Bristol-Myers Squibb, since 2004.

Just last week, the state’s Medicaid fraud unit announced a $1.2 million settlement with the company and a former subsidiary over several alleged practices, including its marketing of Abilify to treat children and dementia patients, for whom it was not approved.

The $1.2 million is New Hampshire’s share of a $515 million national civil settlement, which involved 43 states and the federal government.

The settlement also includes allegations that Bristol-Myers Squibb overpriced various drugs and made illegal payments to doctors to promote the sale of some drugs.

The lead petitioner, Rep. Al Baldasaro, R-Londonderry, said last week that he is happy with Ayotte’s progress, but he wants continued action.

Each year, New Hampshire and the federal government split the cost of Medicaid, which helps pay for health care for the needy, aged and disabled, as well as low-income families with children.

What first caught Baldasaro’s attention was a huge increase in state spending on newer antipsychotic drugs for children — almost $4 million last year, up from less than $300,000 in 2000.

“What got me going is how much money we are spending on Medicaid dollars to drug our kids, and on prescriptions that are designed for adults and not tested for use by children,” he said.

When Baldasaro and other officials saw other states taking drug manufacturers to court to recover money wrongfully collected from them, the legislators wanted the Granite State to follow suit.

In particular, the petition asked Ayotte to sue Bristol-Myers Squibb, manufacturer of Abilify, and Eli Lilly, manufacturer of Zyprexa. Both drugs are prescribed for schizophrenia and bipolar disorder.

Lilly has paid at least $1.2 billion in settlements to Zyprexa users nationwide, over claims they developed diabetes or other diseases from using the drug.

Baldasaro also wants the attorney general to consider joining the U.S. Department of Justice to criminally prosecute drug company executives, where appropriate, again as a deterrent to protect children and others from being placed on powerful medications.

Jeff Cahill, director of the state’s Medicaid fraud unit, won’t talk about any pending investigation. He said it is his office’s policy to neither confirm nor deny any active investigation.

Regarding Ayotte’s response to the petition, Baldasaro said he got a letter from her last month saying that New Hampshire has taken on cases against eight drug companies.

“I can assure you that we continue to be very active in investigating improper conduct and in seeking to recover any funds wrongfully collected from the state,” Ayotte wrote.

Ultimately, Baldasaro and the other petitioners want a deterrent against improper marketing of powerful drugs.

Petition signer Rep. Gene Charron, R-Chester, said full disclosure is needed to protect consumers, and too often those safeguards are lacking.

Consumers are more likely to see an automobile recall than a drug recall, he said.

Charron and Rep. Marilinda Garcia, R-Salem, said too much is at stake — people’s lives, children’s lives.

“We want to make sure that with the increased use of medications by school-age children, that the kids are safe,” Garcia said.

Baldasaro said, as a society, people should think more about prescription habits.

“In general, I think we are too quick to drug our kids,” he said.

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OREGON receives $3M from Bristol-Meyers Squibb settlement


Portland Business Journal

The Oregon Department of Justice Medicaid Fraud Control Unit has finalized a settlement with Bristol-Meyers Squibb and its former wholly owned subsidiary, Apothecon Inc., resolving allegations of illegal pharmaceutical marketing and pricing.

Oregon was joined by 43 states, the District of Columbia and the federal government.

As a result of the settlement, New York-based Bristol-Meyers Squibb paid $389 million in Medicaid restitution, penalties and interest, which was allocated based on states’ payments for the products at issue. Oregon received more than $3 million for its Medicaid program.

“This case is part of a continuing effort by DOJ to pursue fraud in the pricing of pharmaceutical products purchased by the Oregon Medicaid Program,” Oregon Attorney General Hardy Myers said. “Over the last five years, our Medicaid Fraud unit has returned more than $12 million in damages, penalties and interest to Oregon’s Medicaid program.”

The settlement addresses allegations that Bristol-Meyers Squibb engaged in a number of improper marketing and pricing practices for pharmaceutical products that impacted the Oregon Medicaid Program, including:

Reporting inflated prices for various prescription drugs knowing that Medicaid and various federal health care programs would use those numbers to pay for Bristol-Meyers Squibb and Apothecon products used by their recipients;

Illegally compensating physicians, health care providers and pharmacies to induce them to purchase Bristol-Meyers Squibb and Apothecon products for Medicaid patients;
Promoting the sale of Abilify, an antipsychotic drug, for pediatric use and for treatment of dementia-related psychosis, uses for the product that are not approved by the Food and Drug Administration; and

Misreporting sales prices for Serzone, an antidepressant, resulting in the underpayment of rebates owed under the Federal Medicaid Drug Rebate Program.

The settlement reimburses the federal government and participating states for excessive amounts their Medicaid programs paid for Bristol-Meyers Squibb products as a result of the alleged illegal conduct.

As part of the settlement, Bristol-Meyers Squibb entered into a Corporate Integrity Agreement with the Office of the Inspector General of the U.S. Department of Health and Human Services, which requires Bristol-Meyers Squibb to accurately report its average sales prices and average manufacturer prices, governing Medicaid and Medicare reimbursement for its products in the future.

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INDIANA receives $2.2M for overcharges to Medicaid

WANE

Indiana Attorney General Steve Carter says Indiana has received $2.2 million as part of a $500 million national settlement with drug maker Bristol-Myers Squibb (BMS).

The settlement announced last September resolved allegations that the company and its wholly-owned subsidiary, Apothecon, Inc. provided false pricing information for more than 20 drugs leading to excessive reimbursement. It also resolved a number of other claims including off-label marketing and kick-back violations.

Indiana’s total recovery amount was $5.8 million in the settlement. The $2.2 million represents the state’s share of the Medicaid loss with the remainder going to the federal government for its share.

“Taxpayers are ultimately harmed when companies take advantage of governmental services to help the underprivileged,” said Carter. “The recovery of $5 million for Indiana is significant and is one of several such recoveries over the past several years.”

BMS and its subsidiary Apothecon, Inc. were alleged to have engaged in various activities between 1994 and 2004 resulting in overpayments by Medicare and Medicaid Programs.

Some of the claims included:

Payments to physicians in the form of extravagant travel expenses and fees for advisory board service, preceptorships and consulting, all to induce them to purchase drugs;

Payments to retail pharmacies and wholesaler customers in the form of stocking allowances, prebates, and free goods, all to induce them to purchase drugs;

Off-label promotion of Abilify, an atypical antipsychotic drug, to treat pediatric patients and to treat geriatric patients for dementia-related psychosis;

Reporting falsely inflated average wholesale prices, thereby creating a “spread” between the reimbursement rates for federal health care providers and the actual prices for drugs; and

Misreporting its best price for the anti-depression drug, Serzone.

The settlement includes a Corporate Integrity Agreement with the federal government, which requires BMS to report accurate average sales prices and average manufacturer prices for its drugs covered by Medicare and other health care programs.

Carter’s Medicaid Fraud Control Unit (MFCU) handled the settlement agreement. The Unit has recovered more than $17 million for the state in the first seven months of 2008 – exceeding the record $14 million it recovered for the Medicaid program last year.

The agreement includes 43 states, the District of Columbia and the federal government.

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SOUTH DAKOTA wins $700,000 from pharmaceutical company

ARGUS LEADER

The state of South Dakota will receive more than $700,000 in a settlement to be paid by a pharmaceutical company.

South Dakota is one of 43 states and the federal government who will receive part of the settlement from Bristol-Myers Squibb Co. to resolve allegations of illegal drug marketing and pricing of prescription medications by the states’ Medicaid programs.

The settlement addresses allegations that Bristol-Myers Squibb engaged in a number of improper marketing and pricing practices, including reporting inflated prices for prescription drugs and illegally paying health care providers to induce them to purchase their products, among other allegations.

The settlement reimburses the federal government and the participating states for excessive amounts paid by Medicaid programs as a result of this conduct.

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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