Qui Tam Whistleblower Cases Force Bristol-Meyers Squibb to Pay $515 Million to Settle Allegations

Last week, the United States Department of Justice announced that Bristol-Meyers Squibb (BMS) had entered into a settlement agreement to pay more than $515 million to resolve allegations of illegal drug marketing and pricing. This is yet another example where Big Pharma has attempted to gouge the government to increase profits, at the public’s expense. The allegations made by the government, regrettably, are all too familiar and have occurred in many other cases of a similar nature.

The first thing the government alleged was that from 2000 through 2003 BMS knowingly and willfully paid illegal renumeration to physicians and other healthcare providers to induce them to purchase BMS drugs. According to the government, BMS paid illegal renumeration in the form of excessive consulting fees and expenses to physicians in various sham consulting programs, etc. Some expenses involved travel to luxurious resorts. Second, the government alleged that from 2002 through the end of 2005 BMS knowing promoted the use of Abilify, an anti-psychotic drug, for pediatric use and to treat dementia related psychosis, both of which are “off label” uses. The Food and Drug Administration never approved the use of Abilify for children and adolescents or for geriatric patients suffering from dementia related psychosis. Indeed, the FDA had mandated that Abilify carry a black box warning concerning its use in dementia related psychosis. Nonetheless, according to the government, BMS directed its sales force to specifically call on pediatric specialists and nursing homes in order to illegally promote its product.

The third allegation of the government’s complaints against BMS was that it maintained fraudulent and inflated prices on a wide assortment of oncology and generic drug products with the knowledge that bills to federal healthcare programs were based on those fraudulent prices. The government specifically alleged that BMS knowingly misreported its best price for the anti-depression drug Scrzone.

Out of the $515 million settlement, $50 million will be paid to seven different whistleblowers. Also, BMS will be required to enter into a Corporation Integrity Agreement which will require the company to do what it should have done all along, that is report accurate average sales prices and accurate average manufacturer prices for its drugs covered by the Medicare and other federal healthcare programs.

This case is a sad reminder that Big Pharma will use a variety of marketing schemes and other illegal tactics to maximize its profits at the expense of taxpayers. We applaud those who were involved in these whistleblower cases. While the government may not have uncovered the full extent and breadth of the fraud without the assistance from whistleblowers, the fact remains that such fraud seems prevalent in the pharmaceutical industry which is why it is that we continue to hope that other whistleblowers will come forward so that similar wrongdoers can be held responsible, at least financially, for their wrongdoing. Whether a criminal prosecution should also be pursued is, of course, a matter subject to debate but if these same companies continue to engage in illegal marketing, we believe that they should also be criminally prosecuted as well and would expect the Department of Justice to enforce the laws against them regardless of their “special interest” status.