Drug Co. To Pay $515M Over Marketing

Bristol-Myers Squibb Co. and a former subsidiary have agreed to pay more than $515 million to settle federal and state investigations into their drug marketing and pricing practices.

The civil settlement announced Friday resolves a broad array of allegations against Bristol-Myers Squibb, dating from 1994 through 2005.

Among them was a charge that the New York-based pharmaceutical company illegally promoted the sale of Abilify, an anti-psychotic drug, for pediatric use and to treat dementia-related psychoses. Neither use is approved by the U.S. Food and Drug Administration.

In the second quarter, the company reported $412 million in sales of Abilify, approved to treat bipolar disorder and schizophrenia, a 27 percent increase from a year earlier.

Although physicians are permitted to prescribe drugs for off-label uses, drug companies are prohibited from marketing them for uses that have not been approved by the FDA.

U.S. Attorney Michael Sullivan said when pharmaceutical companies market drugs for unapproved uses, there is a potential risk that patients could be harmed, because the drugs have not been tested as rigorously as they are during the FDA approval process.

Prosecutors have no evidence that anyone was harmed by Bristol-Myers Squibb's actions in promoting Abilify for unapproved uses, he said.

"People depend on this industry, thus the industry has an obligation to ensure that all rules, regulations and laws are complied with," Sullivan said.

The government also alleged the company paid illegal inducements in the form of consulting fees and trips to luxury resorts to influence doctors and other health care providers to buy and prescribe the company's drugs. The company's former generic drug subsidiary, Apothecon Inc., also was accused of giving illegal enticements to induce retail pharmacy and wholesale customers to buy its products.

Bristol-Myers Squibb misreported its best price for the anti-depression drug Serzone, violating a law that requires drug companies to report their lowest price to Medicaid, prosecutors said. The company was selling Serzone to a larger commercial purchaser at a lower price, prosecutors said.

Bristol-Myers Squibb and Apothecon also inflated prices for an assortment of oncology and generic drugs knowing that federal health care programs established reimbursement rates based on those prices, Sullivan said.

In a statement, Bristol-Myers Squibb said the settlement would not affect the company's ongoing business with any customers, including the government.

"Bristol-Myers Squibb is pleased to have resolved these matters from the past and is proud of its commitment to conduct business with the highest standards of integrity in its mission to extend and enhance human life," the company said.

Bristol-Myers shares fell 19 cents to $28.82 Friday.