Monthly Archives: July 2008

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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Maryland Attorney General: Maryland and 42 Other States Reach Multi-Million Dollar Settlement with Bristol Myers Squibb to Resolve Medicaid Pharmaceutical Pricing and Marketing Allegations


Insurancenewsnet.com

Maryland Attorney General: Maryland and 42 Other States Reach Multi-Million Dollar Settlement with Bristol Myers Squibb to Resolve Medicaid Pharmaceutical Pricing and Marketing Allegations

BALTIMORE, MD — Attorney General Douglas F. Gansler today announced that 43 states, the District of Columbia and the federal government have settled with Bristol-Meyers Squibb Company (BMS) and its former wholly owned subsidiary Apothecon, Inc., to resolve allegations of illegal drug marketing and pricing of prescription medications. The total amount of the settlement that is to be distributed to the participating states is $389 million plus interest. The federal portion of the settlement was concluded last fall. Maryland’s Medicaid program will receive $2,358,532 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;

* Illegally paying 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-related 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 the Inspector General of the US 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.

A team from the National Association of Medicaid Fraud Control Units participated in the investigation and represented the states’ interests in the settlement negotiations.

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Drug company paying NEW HAMPSHIRE $1.2 million

Associated Press

CONCORD, N.H. (AP) – A national drug company is paying New Hampshire $1.2 million as part of a settlement resolving allegations that the company scammed state Medicaid programs.

Attorney General Kelly Ayotte says Bristol-Myers Squibb Company and a former subsidiary, Apothecon, Inc., agreed to the settlement.

The company was accused of overpricing prescription medicine to Medicaid programs, illegally paying health care providers to get them to buy its drugs, promoting a drug for illnesses for which it had not been approved and misreporting sales prices for another medicine so Medicaid programs got smaller rebates.

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FLORIDA – Drug giant Bristol-Myers Squibb resolves civil case

St. Petersburg Times

By Robert Farley
July 17, 2008

Florida will receive $21.5-million as its share of a global settlement with a pharmaceutical giant accused of illegal marketing and pricing of prescription drugs.

Among the allegations that led to the settlement was that Bristol-Myers Squibb illegally promoted the use of Abilify, one of a handful of new-generation antipsychotic drugs whose soaring use in children and nursing home residents has caused alarm among many mental health professionals.

Abilify and other atypical antipsychotics are FDA-approved to treat adult schizophrenia and bipolar disorder. But Abilify carries a black box warning concerning its use in the treatment of dementia. The government alleged Bristol-Myers Squibb created a specialized long-term care sales force that almost exclusively called on nursing homes, where dementia-related psychosis is far more common than schizophrenia or bipolar disorder.

And although Abilify was approved earlier this year for use in teens with schizophrenia and bipolar disorder, it was not approved for use in children between 2002 and 2005. That’s when, the government alleged, the company directed its sales force to call on child psychiatrists and other pediatric specialists to urge them to prescribe Abilify to their pediatric patients.

In September, the Justice Department announced that Bristol-Myers Squibb and former subsidiary Apothecon Inc. agreed to pay more than $515-million to resolve “a broad array of civil allegations involving their drug marketing and pricing practices.”

Among the other government allegations was that the company paid illegal kickbacks to physicians and other health care providers in the form of consulting fees, and advisory board positions — some of which involved travel to luxury resorts — to induce them to prescribe their drugs. The government also claimed the company set inflated prices for a wide assortment of oncology and generic drugs, and misrepresented its best price for an anti-depression drug, driving up costs to Medicaid …

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NEBRASKA gets $3.2M in settlement with drug company


Columbus Telegram

LINCOLN, Neb. – Nebraska will receive almost $3.2 million as part of a $515 million settlement with a drug company accused of misconduct.

The settlement with Bristol-Myers Squibb and its former subsidiary, Apothecon Inc., was announced Tuesday. In addition to Nebraska, it includes the federal government, 42 other states and the District of Columbia.

Attorney General Jon Bruning says the settlement addresses allegations that the New York-based drug developer reported inflated prices for drugs to Medicaid and other federal health programs and misreported sale prices for an antidepressant, among other things.

The money reimburses excessive amounts paid by Medicaid programs as a result of the misconduct.

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TEXAS Attorney General Abbott Recovers $15.7 Million In Medicaid Costs Under National Settlement

KTRE

AUSTIN – Texas Attorney General Greg Abbott recovered more than $15.7 million for the State of Texas under a national settlement with one of the nation’s largest pharmaceutical manufacturers. The agreement resolves a civil Medicaid fraud enforcement action that Texas and 42 other states filed against Bristol-Myers Squibb Co. (BMS) and its subsidiary, Apothecon regarding their alleged illegal marketing and pricing practices.

According to court documents filed by the states, the defendants failed to comply with state and federal laws that require pharmaceutical companies to report their lowest drug prices to the Medicaid program. As a result, the taxpayer-funded program was defrauded when it overpaid for BMS’ anti-depression drug, Serzone. According to investigators, a wide assortment of BMS and Apothecon’s generic and oncology drug prices were also improperly reported to the states’ Medicaid programs.

State and federal laws require drug manufacturers to report their products’ sales prices to Medicaid. This reporting requirement applies to pricing schemes the manufacturers offer a variety of providers, including pharmacies, wholesalers and distributors. The Texas Medicaid program uses this pricing information to estimate the amount Medicaid’s pharmacy providers pay to acquire the drug manufacturers’ products.

When pharmacies bill the state-run, taxpayer-funded program for prescription drugs and dispensing fees Medicaid’s reimbursement rates are based on the manufacturer-reported pricing information. Because of the falsely reported prices, Medicaid reimbursed pharmacies and other providers at vastly inflated rates. The resulting windfall profits unlawfully induced those health care vendors to purchase the defendants’ products.

State and federal law also prohibits pharmaceutical companies from marketing their products for uses that have not been approved by the U.S. Food and Drug Administration. The multi-state investigation also revealed that BMS improperly marketed and promoted Abilify, an atypical antipsychotic drug, between 2002 and 2005. According to investigators, the defendant unlawfully marketed the product for pediatric use and as a dementia-related psychosis treatment when it had no FDA approval for such use.

This enforcement action stems from a sealed whistleblower lawsuit filed by home-infusion pharmacy Ven-a-Care of the Florida Keys Inc. Acting on similar information from Ven-a-Care, the Attorney General has taken action against numerous defendants for launching similar drug-pricing schemes. Among these are Schering-Plough/Warrick Pharmaceuticals in May 2004 ($27 million); Dey Inc. in June 2003 ($18.5 million); Boehringer Ingelheim/Roxane Laboratories in November 2005 ($10 million); and Baxter Healthcare Corp. in June 2006 ($8.5 million).

The Attorney General’s legal actions against B Braun Medical Inc. of Pennsylvania and Abbott Laboratories Inc. of Illinois remain pending.

Today’s development continues the Attorney General’s crackdown on waste, fraud and abuse in the Medicaid system. In 2006 alone, the Texas Medicaid program cost more than $17 billion. To save taxpayer dollars, Attorney General Abbott has dramatically expanded both the Civil Medicaid Fraud Section and the Medicaid Fraud Control Unit. Since Attorney General Abbott took office, the civil and criminal Medicaid fraud sections have recovered more than $200 million.

With the passage of amendments to the Texas Medicaid Fraud Prevention Act in 1997, the Texas Legislature paved the way for whistleblower lawsuits involving industry insiders, such as Ven-a-Care. Under the law, whistleblowers may be eligible for a percentage of damages recovered.

To obtain more information about the Attorney General’s efforts to fight Medicaid fraud, access the agency’s Web site at http://www.texasattorneygeneral.gov.

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ARKANSAS To Get $1.3 Million From Medicaid Lawsuit Settlement

KARK 4 News

Attorney General Dustin McDaniel has announced the State of Arkansas’s settlement with Bristol-Myers Squibb company (BMS) and its former wholly owned subsidiary Apothecon, Inc. that will return $1.3 million to the Arkansas Medicaid program.

The Attorney General participated in a multi-state effort led by the National Association of Medicaid Fraud Control Units that included 43 other states, the District of Columbia, and the federal government.

Specifically, the global settlement with BMS resolves 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 Arkansas’s share is $1.3 million. 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-related 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.

“I am very pleased with the result of this investigation and thank those states that took the lead in the effort,” said McDaniel. “While this is a good result and a step forward, there is no doubt that others have, and continue to be, engaged in similar conduct. Accordingly, I remain committed to investigating and redressing such behavior so as to ensure that Arkansans are being prescribed medication based on need, not on monetary favors, and to preserve the precious assets of our Medicaid program.”

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