The National Association of Medicaid Fraud Control Units announced on July 15, 2008 that 43 states, the District of Columbia, and the federal government have settled with Bristol-Meyers Squibb Company (BMS) and its former wholly owner subsidiary Apothecon, Inc., to resolve allegations of illegal drug marketing and pricing of prescription medication paid by the participating states’ Medicaid programs totaling $389 million plus interest. The federal portion of the settlement was concluded last fall. The Commonwealth of Kentucky will receive $3,078,211.78 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.
Paying illegal remuneration to physicians, health care providers, and pharmacies to introduce 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 a part of the settlement, BMS has also entered into a Corporate Integrity Agreement with the Office of the 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 process 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. Team members include Unit Directors from Ohio and Vermont as well as Assistant Attorneys General form Massachusetts, New York, and New Mexico.
Attorney General Jack Conway praised the settlement, stating “I am pleased that auditors and attorneys from our Medicaid Fraud Division, working in close cooperation with this team, have recouped these state Medicaid funds. In these tight budget times, it is more important than ever that we be diligent in our efforts to recoup state funds that have been obtained improperly.”