By Attorney General’s office
Attorney General Richard Blumenthal, Chief State’s Attorney Kevin T. Kane and Department of Social Services (DSS) Commissioner Michael Starkowski today announced that Connecticut will receive about $1.9 million in a nationwide settlement with drug maker Bristol-Myers Squibb (BMS) and its former subsidiary.
The agreement settles allegations that the company and its former subsidiary, Apothecon, Inc., defrauded state Medicaid programs by providing false pricing information for more than 20 drugs, paying kickbacks and illegally marketing drugs for uses unapproved by the Food and Drug Administration.
The $389 million settlement is with 43 states, the District of Columbia and the federal government. The agreement ends a seven-year state-federal investigation.
Blumenthal said, “The nearly $2 million returned to the state by this company resulted from a purposeful, systemic scheme of overcharging for vitally needed medicine. The company and its subsidiary defrauded the state by concealing cost information, paying kickbacks, engaging in illegal marketing and cutting secret deals. This sweeping campaign to steal from the state and federal governments is reprehensible and repulsive. My office will continue to vigorously and aggressively enforce the law to ensure taxpayers pay not a penny extra for Medicaid drugs.”
Kane commended the Medicaid Fraud Control Unit in the Office of the Chief State’s Attorney, the Office of the Attorney General and the Department of Social Services for their continuing cooperation to combat fraud and abuse in the Medicaid program to recover misused tax dollars.
Starkowski said, “The $1.9 million due to Connecticut as a result of this settlement will help offset expenditures in our Medicaid program for low-income citizens. The investigation and settlement are further indication that constant vigilance is needed to protect the fiscal integrity of public health programs, which comprise the largest part of human services budgets in Connecticut and other states.”
Allegations against Bristol-Myers Squibb and its subsidiary Apothecon, which the company has since sold, included:
• Deliberately providing federal officials with inflated the average wholesale drug prices for 16 Apothecon and seven BMS drugs, most of them cancer medications. As a result, Medicaid, the cost of which is split by the federal and state governments, overpaid tens of millions of dollars for the medications.
• Apothecon paid millions of dollars in kickbacks to pharmacies and wholesalers to carry its products.
• BMS provided kickbacks to physicians in order to increase its market share for various drugs. Those kickbacks included paying doctors to attend “physician consulting programs” at luxury resorts where the company also provided lavish meals and tickets to sporting events. While attending these events, doctors were given presentations on various BMS drugs.
• BMS actively and aggressively marketed Abilify, a anti-psychotic drug, for uses unapproved by the FDA. Those unapproved uses included use in children and treating dementia-related psychosis. Marketing drugs for users other than those approved by FDA is illegal.
• Providing Kaiser Permanente with a deep discount for the antidepressant Serzone, and concealing that discount from federal officials. That artificially inflated the average wholesale price for the drug, increasing costs to the state.
In addition to $1.9 million to Connecticut, the federal government will receive about $1.7 for its share of the cost of Connecticut’s Medicaid program.