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

BALTIMORE, MD (July 17, 2008) – 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.